Rick Connor

THIS IS MY 150TH article for HumbleDollar. My first appeared on Aug. 12, 2019. I’m not sure when I became aware of the site, but it’s become an important part of my life. I’ve truly enjoyed the writing, along with reading the work of others and interacting with the editor, other contributors and readers.
For my 150th, I thought about looking back over the past five years and compiling a list of 150 observations.

HOW DO WE MEASURE societal wealth? And what triggered this thought?
I started pondering the issue early last year. I had a total left knee joint replacement in January 2023. Not long after, I was sitting in my living room with an ice pack on my knee, having just completed a strenuous set of stretches and exercises.
The room was being warmed by a modern gas fireplace, lit by a remote control. No wood to split,

JANE IS A SINGLE woman in her 80s, sharp and friendly. She’s a former state employee with a solid retirement income. Unfortunately, she’s suffered some health issues in the past few years that have forced her to make serious changes.
I became aware of her issues when she came into the local AARP TaxAide site where I volunteer. She was the last client of the day, and the other scheduled client had rescheduled, so she got our full attention.

WHAT WILL BE YOUR legacy? This is something I’ve given a lot of thought to—right down to the funeral instructions.
Something I’ve learned through hard experience: One of the greatest gifts we can give to our families is a well-organized and well-communicated estate plan. They’ll appreciate it when the time comes.
Too many of us wait until an emergency to try to get our affairs in order. A severe illness or death is stressful enough.

THE LONGER I SPEND in retirement, the more convinced I am of the benefit of reliable income. One of retirement’s most pronounced psychological shocks is the loss of a regular paycheck. After four decades of working, you get used to one coming in every two weeks. The occasional consulting paycheck, even a small one, makes me inordinately happy.
I’m fortunate to have a traditional defined-benefit pension. It built up over 31 years of working with a large aerospace engineering firm.

I KEEP SEEING THEM—overly complicated, overly expensive investment portfolios. The most recent belonged to a widow in her 70s, with modest earned income, Social Security benefits and about $5,000 in taxable fund distributions for 2023. She was someone I helped during the recent tax-filing season, when I was volunteering at an AARP TaxAide site in Monmouth County, New Jersey.
Her portfolio held about a dozen mutual funds, most of which I’d never heard of.

OUR INCOME TAX SYSTEM is based on voluntary compliance. Taxpayers are responsible for reporting all their income and paying the required taxes.
In assessing tax returns, the IRS differentiates between tax avoidance and tax evasion. Tax avoidance is “an action taken to lessen tax liability and maximize after-tax income,” while tax evasion is “the failure to pay or a deliberate underpayment of taxes.”
What are the major sources of tax evasion? Under-reporting income seems to be No.

I RECENTLY WROTE an article about our purchase of a new primary residence, and our plans for our existing beach house. On the same day, HumbleDollar published a companion article that I also wrote. That second piece discussed the tax implications—and complications—of converting a former primary home to a rental property.
We had purchased the new home using a mortgage, and our plan was to refinance the beach house and use those funds to pay off the mortgage on our new primary residence.

SOCIAL SECURITY retirement benefits are a critical source of income for many seniors. But as I’ve discovered from preparing tax returns, there’s a lot of confusion surrounding two key issues.
The first issue: the reduction in benefits that occurs when folks claim benefits before their full retirement age (FRA) of 66 or 67, but continue to work. This is the so-called earnings test. If folks are under their FRA for the full year, the Social Security Administration will reduce their benefits by $1 for every $2 earned above $22,320,

SAVINGS YIELDS SOARED in 2023—and all that interest income is now showing up on people’s tax returns.
Forbes published historical average money-market rates based on FDIC data. The average rate in 2020 and 2021 was 0.1%. That jumped to 0.15% in 2022 and 0.59% in 2023. But remember, those are averages, and it isn’t difficult to find higher yields. For instance, interest rates on high-yield savings accounts are up sharply since spring 2022.

ON OUR RECENT TRIP to Alaska, I was surprised by the number of solo women passengers. It turns out I shouldn’t have been.
According to a recent report from Road Scholar, a not-for-profit travel company geared toward those age 50 and older, a quarter of its travelers were single, with 85% of them women. That group included married folks traveling solo. It’s a growing trend. The Road Scholar study reported that 60% of the company’s solo travelers in 2022 were married.

VICKY AND I ALWAYS knew our retirement home would need to be near our two sons and their families, so we could be part of our grandchildren’s lives. It’s taken a few years and a pandemic, but we finally made that happen.
We purchased a new home in Monmouth County, New Jersey, in September 2023. We’ve now moved in, and we’re already enjoying more time with our grandsons. We’ve also met some very welcoming neighbors.

WE SOLD OUR PRIMARY residence in the Philadelphia suburbs and moved to our New Jersey beach home in March 2021. The sale allowed Vicky and me to take advantage of what’s arguably the most valuable tax break available to everyday Americans: the capital-gains tax exclusion on the sale of a primary residence.
But while the tax break is valuable, it comes with strict and often-confusing rules—and those rules may work against us now that we’ve moved home yet again.

WHEN I LAST REPORTED on our retirement journey, we’d decided to put our search for a second home on hold. Well, in the immortal words of Saturday Night Live’s Emily Litella, “Never mind.”
We looked at many properties in several communities earlier this year, but we didn’t find anything we wanted to purchase. We decided on a cooling-off period, while we pondered what our next step should be. We kept a casual eye on properties coming up for sale,

ALASKA FINALLY HIT the top of our bucket list. A number of friends had made the trip and returned with glowing reports of the scenery, wildlife and fresh seafood. Vicky and I each had our own No. 1 reason for the trip: She wanted to see whales, and I wanted to see the Northern Lights.
Alaska’s Inside Passage is often the destination for travelers headed to the 49th state. There’s a wide variety of ships that ply those waters,

I THOUGHT I HAD a pretty good handle on health savings accounts, or HSAs. My wife and I contributed to HSAs over the decade before we retired. The money we accumulated has come in handy in the early years of retirement. I’ve also written several articles extolling their virtues.
But I recently learned that we missed an opportunity to further fund these accounts, while simultaneously reducing future required minimum distributions. The trick is to do a rollover from an IRA to an HSA.

WHAT’S THE PURPOSE of life? Is it to die with as much money as possible or, as magazine publisher Malcolm Forbes was quoted as saying, “He who dies with the most toys, wins”? An intriguing and provocative book, Die With Zero, says no.
The book’s author is Bill Perkins, a successful energy trader. In it, he argues that the purpose of life is to accumulate as many fulfilling experiences as possible,

ONE OF THE MORE challenging changes that comes with retirement is the loss of your employer’s health care benefits—and I’m not just talking about regular health insurance. Two other benefits that employers commonly provide are dental and vision coverage.
Traditional Medicare doesn’t cover common dental procedures, such as cleanings, fillings, extractions, dentures, dental plates and other dental devices. Medicare also doesn’t cover the cost of eyeglasses, lenses or contacts, which many of us were used to obtaining using our employer’s vision coverage.

MANY OF US ENJOY chasing discounts at grocery stores and other businesses. For instance, one of my favorite local wine shops gives discounts to club members. To sign up, all you have to do is provide your contact information.
Lately, the store has stopped requiring me to give my name when I make a purchase. Instead, employees automatically give me the discounted price. Maybe I’m buying too much wine and they recognize me.
In my area,

I RECENTLY LISTENED to an interesting Hidden Brain podcast discussing different ways of bringing about behavior change. The guest on the podcast was Loran Nordgren, a professor at Northwestern’s Kellogg School of Management and coauthor of a book entitled The Human Element. The discussion centered on two related concepts: fuel and friction.
Fuel is the stuff we use to motivate ourselves and the people in our lives. It can be positive or negative.

I WROTE MY ESSAY for My Money Journey 14 months ago. Since then, our family’s journey has continued apace—including rethinking where we live.
The highlight of the past 14 months was the addition of another grandchild. We now have four grandsons, ranging in age from five months to 10 years old. Last summer, our younger son and his wife purchased a home in Monmouth County, New Jersey, roughly an 80-minute drive north of us.

MANY RETIREMENT savers fund tax-deferred accounts—with good reason: The money we contribute pre-tax to an IRA or 401(k) reduces our taxable income, plus that money grows tax-deferred until withdrawn.
But there are two lesser-known benefits that are worth keeping in mind. First, with IRAs and solo 401(k)s, you can contribute for last year right up until the tax-filing deadline in April of the following year. That means you can calculate your tax bill, make an IRA contribution that’s credited to last year—and voila—cut the tab you owe Uncle Sam.

RICHARD NIXON IS best known for the infamous Watergate scandal. But how many of us remember that, prior to Watergate, he got caught up in another scandal over a suspect tax deduction?
In 1969, Nixon donated more than 1,000 boxes of his official papers to his presidential library and attempted to claim a $576,000 charitable deduction. This caused an uproar, and served to start turning much of the nation against the president.
Congress got involved,

SERIES I SAVINGS bonds have garnered a lot of press over the past year. Thanks to higher inflation, these bonds have become a lot more attractive. Although savings bonds have historically been a go-to gift for birthdays, baptisms and bar mitzvahs, they’re more complicated than you might think. I bonds have a number of features that can confuse the average investor, me included.
Series I savings bonds, or I bonds, are designed to protect an investor from losing money to inflation.

RECENT HUMBLEDOLLAR articles have addressed issues of aging, including defrauding the elderly, end-of-life considerations and preparing our homes to age in place. It must be the season for worrying about the elderly because I’ve also had their welfare on my mind, thanks to several recent events.
First, a friend’s 93-year-old mother fell down a flight of steps in her home. A faulty handle came loose from a door at the top of a staircase,

THIS IS MY FIFTH year providing income-tax preparation as part of the IRS’s Volunteer Income Tax Assistance program. This year, my colleagues and I have seen something new. We’ve had numerous retired taxpayers who have received IRS Form 1099-K for the sale of personal property. They’d never received one before and found it confusing.
What triggered these 1099-Ks? Many retirees find ways to supplement their income—including selling items on the internet. This is the modern version of yard sales and flea markets.

JOINT REPLACEMENT surgery is a rite of passage for many retirees. I’d be willing to wager that a majority of HumbleDollar readers have either had one themselves or know someone who has.
The American Academy of Orthopaedic Surgeons says hip and knee replacements are the most common types of total joint replacement. From 2012 to 2021, 2.55 million of these procedures were performed, according to the American Joint Replacement Registry, which is the academy’s data repository.

I ENJOY WRITING for HumbleDollar—but I often feel I get more from the thoughtful reader comments than whatever insights I provided. For instance, in a recent article, I discussed some year-end financial decisions I was considering. Two readers made comments that caused me to review my decisions, while also delivering a few dollars’ worth of humility.
The first comment identified an error in my spreadsheet analysis. I noted that my marginal New Jersey state income-tax rate was 8.97%.

HERE ARE MY TEN favorite articles that I’ve written over the three-plus years I’ve been a part of the HumbleDollar community. Although I write my share of technical and analytical articles, the ones I like the most have a human element.
As my wife will attest, I’m a bit of a softy, and care deeply about my family and friends. I like happy endings and want to see people succeed, especially the generations to come.

INCOME SHOULD BE ONE of the simplest concepts in financial planning—and yet it turns out to be one of the most confusing, thanks to the multiple ways it’s calculated depending upon whether it applies to income taxes, Social Security and so on. My goal today: Help you sort out income’s shifting definition across the U.S. tax code.
Gross income. This is the granddaddy—income from all sources, before almost any taxes or deductions.

SOME PROFESSIONAL investors make a living through arbitrage, exploiting small, short-term differences in the price of stocks, bonds, commodities and currencies. For the average investor, such trades can seem far too complicated. Still, I often look for opportunities for what I call “everyday arbitrage”—situations where I can take advantage of a difference in, say, tax rates or a product’s price.
Here’s an example: In a recent article, I wrote about how 2022’s higher interest rates will significantly reduce the payouts that some retirees will receive from the 2023 lump-sum option on their pension.

I RECENTLY WROTE about things we can do to protect our finances in the event we suffer cognitive decline. This may not be anybody’s favorite subject, but it’s an important one.
 Many of us have first-hand experience with the ravages of dementia. It can upend a carefully crafted retirement plan and necessitate costly medical care. Like many of my friends and colleagues, I’d like to know if there are things I can do to prevent or forestall the onset of mental decline.

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.

MY WIFE AND I JUST returned from our annual Thanksgiving vacation on North Carolina’s Outer Banks. This is a yearly outing for our immediate family, my wife’s four siblings and their families. This year we numbered 43, representing three generations of siblings, children, grandchildren, nieces and nephews, along with significant others.
I wrote an article about this family tradition three years ago. It started in 1995, and has been held 25 times since. We’ve only missed two years—one because of a family wedding in California and another due to COVID-19.

MUTUAL FUNDS ARE about to send their shareholders some dubious holiday gifts—in the guise of capital gains distributions. These distributions usually occur mid-December and they represent a taxable event for investors who hold funds in a taxable account.
Even in a down year for stocks and bonds, a mutual fund may realize capital gains, which are then passed on to shareholders. These could come as a nasty surprise to investors already smarting from 2022’s steep losses.

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 WIFE VICKY AND I have lately been discussing—yet again—when to claim our Social Security retirement benefits. We’re fortunate to have multiple sources of retirement income, including a defined benefit pension, traditional IRAs, Roth IRAs and two health savings accounts.
To date, we had assumed we’d both delay claiming Social Security until age 70, so we get the largest benefits possible. Until then, we’d planned to live on my pension, any consulting income I earn,

COPING WITH FINANCIAL complexity as we age can lead to major problems—and denial isn’t the solution. What to do? One HumbleDollar commenter, in response to a recent article, recommended a book, What to Do When I Get Stupid, by economist Lewis Mandell.
The book has two main themes. First, we should try to create a guaranteed stream of income, preferably one that’s linked to inflation, to cover our core retirement expenses.

MY FAVORITE NOVEL by Jules Verne is Around the World in 80 Days, which I first read as a child. It was published in 1872, and documented Phileas Fogg’s attempt to circumnavigate the world in 80 days.
The book has been made into a play, six movies and a half-dozen television series, including a recent entertaining PBS series. The Three Stooges even released a feature film version in 1963.
The Wikipedia entry for the novel lists 10 real-life attempts to replicate the fictional journey.

REMEMBER THE OLD sayings that “the cobbler’s children have no shoes” and “the carpenter’s house is falling down”? That’s how I felt last month as I frantically tried to enroll in Medicare.
My 65th birthday was in early September. Medicare has an initial enrollment period that lasts seven months. It starts three months before you turn age 65, includes your birth month, and ends three months after the month you turn 65. Suppose you were born on Sept.

RISING INTEREST RATES are impacting everyone. The Federal Reserve has raised short-term rates at its last five meetings. It hiked interest rates 0.75 percentage point at its September meeting, the third time this year it’s raised rates by that amount. Bankrate reports that current projections see the Fed boosting rates by another 1.25 percentage points before year-end.
These increases affect what consumers pay for mortgages, car loans and credit card debt. As I write this,

MY WIFE RECENTLY ASKED me if there was anything I wanted for my 65th birthday. She was racking her brain for a special gift, but was coming up empty.
I thought for a while, but couldn’t think of anything I really wanted. We have all the stuff we need. We’re blessed with a wonderful family, we live in a great beach town and we have enough assets for a comfortable retirement. We’ve spent 2022 working on our health and fitness,

I HAVE A MILESTONE birthday this month—turning age 65. This has long been considered the standard retirement age.
When the Social Security Act was signed into law in 1935, 65 was the age at which workers could receive retirement benefits. Many companies’ defined benefit pension plans still use 65 as the age at which employees can receive an unreduced pension. And 65 is the age at which folks become eligible for Medicare.
This is also the median age at which workers expect to retire,

MY WIFE AND I JUST returned from the first extended road trip of our retirement. We were away two weeks, drove 2,800 miles and visited 10 states. The primary reason for the trip was to stay five days on a houseboat on Beaver Lake, Arkansas, with seven friends.
We broke the trip into three phases. The first part took us from New Jersey to northwest Arkansas in two-and-a-half days. Along the way, we stopped in St.

SEQUENCE-OF-RETURN risk has long been a major concern among retirees—and it’s a real danger right now for those who just quit the workforce or soon will. Also known simply as sequence risk, it refers to the chance that the market declines sharply, forcing retirees to sell investments at depressed prices to generate income.
Wade Pfau, a leading retirement researcher, published a paper highlighting the danger involved. As he makes clear, a few years of market losses coupled with portfolio withdrawals can decimate savings,

BOSTON COLLEGE’S Center for Retirement Research just published a study that explores what Americans think are the biggest risks to their retirement—as opposed to what they objectively are. The center found “a big disconnect between how actual and perceived risks are ranked.” That disconnect could be hurting people’s retirement planning.
The study says the biggest risk to retirement is longevity—living so long that we run out of money. But the survey found that the biggest perceived threat is a market drop that cuts into savings,

HAVE YOU GOT children or grandchildren with summer jobs? That means you could put them on the path to financial success—by helping them open a Roth IRA.
My brothers and I always had jobs, including delivering newspapers, bussing tables, mowing lawns and valet parking. My sons also had jobs at an early age, including shucking thousands of ears of corn at our local swim club. Later on, they were lifeguards, along with many of their friends from the swim team.

WHEN I WAS LEARNING about investing, dollar-cost averaging was one of the first strategies I read about. Over the years, I’ve come across a number of articles debating the strategy’s virtues, usually comparing it to a onetime lump-sum investment.
Dollar-cost averaging consists of making a series of periodic investments rather than buying all at once. These purchases occur at regular intervals, regardless of the investment’s price that day. Using this strategy, you can purchase more shares when prices are lower.

WHEN MY WIFE AND I were young, it was common to receive savings bonds for major events, such as birthdays and religious celebrations. We carried on the tradition with our two sons and we’re planning to do the same for our grandchildren.
With our sons, we bought savings bonds to mark significant childhood milestones. We held on to those paper bonds for many years, and gave them to our sons when they graduated college.

FALLING IS ONE of the scariest health risks that seniors face. According to the Centers for Disease Control, more than one in four seniors fall each year. The CDC estimates that over three million older people are treated in emergency rooms for falls annually, and more than 800,000 are admitted to hospital.
Most hospitalizations after a fall are to treat head or hip injuries. Falls also cause broken bones, especially in wrists, arms, ankles and hips.

INFLATION IS HURTING all of us—but in different ways. Even as the Federal Reserve tries to tame the inflation beast, it’s also prudent to look at our own spending and see if there are ways we can help ourselves.
What are some of the things my wife and I are doing? We had a recent discussion about the issue and came up with a list of modest changes we plan to make:

We’ll drive less.

INFLATION HAS BEEN the big economic story of 2022. Steep increases in consumer prices have hurt families in many ways—some of which aren’t so obvious.
You’re likely aware of the hefty increases in borrowing costs, home prices, rents, gas prices and groceries. But here’s something else to consider: how inflation can lead to higher taxes.
Important parts of the federal tax code aren’t indexed for inflation. Result: If inflation leads to nominal increases in a family’s income,

THE COVID-19 PANDEMIC has disrupted so many aspects of our lives. I was reminded of that recently at, of all places, a bar in the Myrtle Beach, South Carolina, airport.
My wife and I were returning from our 40th wedding anniversary trip to Charleston, South Carolina, and Sunset Beach, North Carolina. Our evening flight was delayed, so we decided to get a glass of wine at a small kiosk bar in the terminal.
The bartender was a young woman in her early 20s.

IN EARLY JANUARY, I wrote an article describing my New Year’s resolution. My No. 1 goal was, and still is, to improve my health and fitness. It’s now six months later. Here’s a review of the results so far—the good, the bad and the ugly. Let’s start with the good:

Weight loss. I’ve shed more than 70 pounds since the beginning of the year. This has improved my life in so many ways.

LAST MONTH MARKED 40 years of wedded bliss for my wife and me. I’m amazed at how fast the time has gone. I still remember the day we met. It was at a party celebrating her high school graduation. I gave her a ride to pick up a pack of cigarettes, all the while lecturing her on the dangers of smoking. I believe I saved her from a lifetime of smoking. She saved me from everything else.

MY WIFE AND I RECENTLY took advantage of one of the most valuable tax breaks for the typical American family. The tax code provides a generous exemption on the profit from the sale of a primary home. Although this is widely known, it also—based on my conversations with a variety of people—seems to be widely misunderstood.
The Taxpayer Relief Act of 1997 made a major change to the taxation of home sales. Prior to this,

ARE YOU IN YOUR 60s and worried about rising consumer prices? It’s worth understanding how inflation affects Social Security benefits—especially its impact on those who postpone claiming their monthly check.
Social Security benefits jumped 5.9% in 2022, thanks to the annual cost-of-living adjustment. This inflation increase was based on the Bureau of Labor Statistics’ CPI-W. This was the largest adjustment since 1982, and it affected nearly 64 million retirees. The increase took effect in January.

SOCIAL SECURITY’S complexity never fails to surprise. While many retirees have some sense for what factors determine the size of their Social Security check, few appreciate just how involved the benefits calculation can be.
For example, have you ever wondered what the Social Security Administration does if you continue working after starting benefits? It’s not a simple answer. There are two distinct treatments depending on whether you start benefits before or after you reach your full Social Security retirement age,

LOSS AVERSION IS ONE of the most powerful behavioral-finance phenomena. It’s often defined as “losses loom larger than gains.” It’s been said that the psychological pain from a loss is about twice as powerful as the pleasure from an equivalent gain.
Boy, am I feeling that right now. This year’s market losses have many of us concerned. But this year is different for my wife and me. This is our first year with no consistent earned income.

I JUST COMPLETED my fourth year preparing tax returns as part of the federal government’s Volunteer Income Tax Assistance (VITA) program. I’ve seen first-hand how confusing our tax code can be for many taxpayers. Here are the 10 areas of confusion I’ve encountered most often:
1. Income. Anyone looking through a tax return will see multiple definitions of income. There’s total income, adjusted gross income (AGI), modified adjusted gross income, provisional income and taxable income.

FIVE YEARS AGO, there was a big increase in the price of the “America the Beautiful: National Parks and Federal Recreational Lands Senior Pass.” For a one-time fee, the pass gives people age 62 and older free lifetime access to many of America’s most popular vacation and day-trip spots.
How big was the increase? In 2017, the price of the senior pass went from $10 to $80. I tipped off some older relatives about the looming price increase,

MARCH 31 MARKED the fifth anniversary of my retirement from fulltime work. Back then, I didn’t think I was retiring and I’m still not sure I really have retired. Instead, over the past five years, I’ve described myself as semi-retired. But a recent HumbleDollar article provided a better description of my situation: I’m in a “phased retirement.”
How have things gone, what have I learned and what would I have done differently?

RETIREMENT COMES with many risks, but the scariest I’ve witnessed is dementia. It’s estimated that more than six million Americans are living with Alzheimer’s, and they account for just 60% to 80% of all dementia cases.
Other types include vascular dementia, frontotemporal dementia, Parkinson’s disease dementia and Lewy body dementia. Drug side effects, brain injury, depression and alcoholism can create dementia symptoms, too. The symptoms may get better when those conditions are treated.
Whatever the cause,

THIS IS MY FOURTH year serving in AARP Foundation’s TaxAide program. I prepare federal and state tax returns three days a week for a mixture of retirees and lower-income citizens.
Each week, I see clients who are baffled by the complexity of our tax code. Many have been paying hundreds of dollars to commercial preparers because they’re afraid of making a mistake.
And no wonder. The federal tax code has myriad twists and turns that can confound the average taxpayer.

I LEARNED SOMETHING new while preparing a tax return recently for a widowed senior citizen. I volunteer for AARP Foundation’s TaxAide program. A widow in her mid-70s had received her 2021 required minimum distribution (RMD) from her IRA—and it consisted entirely of Exxon Mobil stock.
Her account’s custodian, instead of selling the stock and distributing cash, gave her the actual shares. This had never happened to her before, and she hadn’t requested it. Why did the custodian do it?

RECENT NEWS ARTICLES have noted the sharp increase in early retirements, many triggered by the pandemic. Just over 50% of Americans age 55 and older are now retired, a two percentage point increase from 2019, according to a Pew Research Center analysis.
I have several friends and colleagues who are bucking that trend and instead delaying their retirement. They’re financially set but concerned about the transition from fulltime work to “doing nothing.” Yet some of these same workers are also struggling with changes in their companies and industries.

IT’S OFTEN SAID THAT beauty is in the eye of the beholder. The same could be said of fairness in taxation.
A recent article by Kelly Phillips Erb addresses this contentious topic. Erb, who tweets as @TaxGirl, is the team lead for insights and commentary at Bloomberg Tax and Accounting. Her article was titled, “Did you pay your ‘fair share’ of federal income tax this year?”
The piece discusses the history and current state of U.S.

MY BROTHER AND I recently reminisced about the investment club we helped found in the late 1980s. The club’s benefits were threefold: financial education, the pooling of money and camaraderie.
Our club was composed of family and friends. We met monthly. When we started, investing was largely a manual process. There were few discount brokers and even they charged relatively high fees. You bought and sold with a phone call, and mailed checks for payment.

IS IT JUST ME OR HAS dealing with health insurance companies become more confusing and frustrating? Trying to figure out who to speak to feels like that classic Abbott and Costello comedy routine, “Who’s on first?”
My wife retired last July. For the previous four years, we’d used her employer-provided medical benefits and now we needed to shop for coverage. Under my old employer’s pension plan, pension-eligible employees like me—who retired prior to beginning Medicare—were eligible to sign up for one of the company’s medical plans.

I HATE LOOKING AT life through the lens of taxation. But at this time of year, it’s hard to avoid.
I’ve been doing my own taxes for more than four decades. But this year represents a new milestone in my tax return preparation career. We moved from Pennsylvania to New Jersey at the end of March 2021, so I’ve had to prepare 2021 tax returns for both states. Although I’d researched New Jersey’s tax code and made an estimate of what the differences would cost,

I RECENTLY HAD a chance to go back in time. An alumnus from my high school is spending his retirement documenting the school’s football program. He’s done an amazing job. He created a YouTube channel populated with an extensive library of game films dating back to the 1950s.
I recently stumbled across the channel, and scrolled to my senior year, which was 1974-75. I played tight end on arguably the worst team in my high school’s long and storied history.

AS A YOUNG ENGINEER at General Electric, I took a three-day class on career development. That class strongly influenced my thinking about my career—and my life. The class made use of a great little book by David P. Campbell called If You Don’t Know Where You’re Going, You’ll Probably Wind Up Somewhere Else.
The premise of the book is that life is a journey, not a destination. We should set some basic goals that help guide our journey,

LOTS OF RESEARCH has been done on the best way to generate retirement income. It’s one of the most popular topics on HumbleDollar. I think this popularity is driven by two things: its obvious importance—and the fact that there’s no one right answer.
By contrast, figuring out how much we need to save for retirement is relatively easy. It isn’t hard to pick a future retirement date, or at least a range of years during which we’ll likely retire,

WHAT IF WE MADE IT easier to delay Social Security, so more retirees ended up with a larger monthly check?
Last year, I wrote about a study from Boston College’s Center for Retirement Research (CRR) that detailed the value in claiming Social Security later. A new CRR paper examines the topic further.
The paper describes a survey of those nearing retirement. The goal: to gauge interest in using a 401(k) “bridge” to generate income while folks delayed claiming Social Security.

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,

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.

PREPARING FOR infirmity is one of the most important—and least popular—parts of financial planning. A neighbor’s recent stroke provides a stark example of this challenge. He’s in his mid-80s and has some underlying health problems.
Our neighbor lives in a second-story condominium, with external stairs as access. The stairs end at a narrow deck, with a right-hand turn into the home. An overhang blocks the screen door from opening fully.
When he had a stroke,

LIVING A HEALTHY lifestyle is one of the most important aspects of a happy retirement. It is, alas, also one of the most difficult goals for many of us to achieve. A 2005 Boston College Center for Retirement Research study concluded that health was the second most important factor in determining the happiness of retirees—and those with poor health “experience dramatically lower levels of well-being.”
I stopped working fulltime on March 31, 2017. My health,

MARKET STRATEGIST and economist Ed Yardeni says the current bull market is “the most hated and feared bull market that any of us have experienced, maybe in history.” This quote came from an interesting interview published in ThinkAdvisor, a magazine for financial professionals.
Worried about today’s lofty stock prices? You may find Yardeni’s views comforting. When asked about his market outlook, he commented on the strength of the current bull market, which started in 2009.

IF YOU’RE A NUMBERS geek who’s also interested in Social Security, the recently released OASDI Beneficiaries by State and County 2020 report is for you. Put out by the Social Security Administration (SSA), the report provides a wealth of interesting statistics.
Here are some basic numbers for context. As of December 2020, the U.S. population was 329,484,123. The population age 65 or older was 55,659,365, or 16.9% of the total. The SSA provides benefits to retirees,

I HAVE A SECRET to share. I’m a Fire God, and quite proud of it. My first engineering job was with General Electric’s Aerospace Division in Valley Forge, Pennsylvania. I started in the thermal engineering group. The group was responsible for the design, fabrication, integration, testing and operation of spacecraft temperature control systems.
An important part of the design was managing the heat input from the sun. Since the group “controlled the sun,” someone gave the group the moniker “Fire Gods.” I knew none of this when I joined as a young graduate.

I HATE TO BE WRONG. I’ve written before about the technique I’ve developed for evaluating health insurance. My wife and I have used it over the years to decide which plan to select. I’ve shared it with friends and colleagues, and many have found it useful in gaining insight into their own health insurance options. I still think it’s a valid and valuable method.
But our recent experience, after switching health insurance mid-year, made me realize it was missing one important variable—the length of time you’ll be in the plan.

I STARTED MY CAREER with a little-known engineering company called SAI. It’s now called SAIC, short for Science Applications International Corp., a publicly traded and internationally renowned technology firm. But when I started in 1980, there were only a few thousand employees and several small, independently run offices scattered across the country.
SAI was started in 1969 by Dr. J. Robert Beyster, a nationally recognized expert in nuclear physics and national security. He started the company with the dual tenets of technical excellence and employee ownership.

SENIORS RECEIVING Social Security celebrated the recent announcement that their benefits will increase 5.9% this January. It’s the largest cost-of-living adjustment (COLA) in 40 years, and it’s based on a measure of inflation called the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W).
As the name implies, CPI-W is a “monthly measure of the average change over time in the prices paid by urban wage earners and clerical workers for a market basket of consumer goods and services.” The index jumped 5.9% between the third quarters of 2020 and 2021.

WE ALL SUFFER, in ways large and small, from COVID-driven shortages. The global supply chain has been disrupted, affecting automobiles, furniture, building supplies and much more.
But the impact really hit home last month when my brother-in-law called and told me he couldn’t find his favorite bourbon. He lives in central North Carolina, where liquor sales are limited to state-owned stores. He had to go to three stores to find his backup brand, Maker’s Mark.

THE PREDOMINANT WAY financial planners get paid is by charging a fee based on the amount of money they’re managing. The typical industry fee I’ve seen is 1%, and it’s been that way for years. Under this model, a financial planner managing a client’s $1 million portfolio would charge $10,000 a year.
Charley Ellis’s recent article explained how this approach came into being. His article also demonstrated how a seemingly innocuous 1% fee can actually consume a large portion of a portfolio’s return.

I RECENTLY SPOKE with a colleague. I’d expected him to be retired by now. He told me that he’d planned to retire last spring, but his employer offered him a three-day-a-week part-time schedule with full benefits. He discussed it with his financial planner.
The planner told him that, if he retired, he had an 85% chance of meeting his retirement goals. By working part-time for two more years, his chances of meeting his goals went up to 95%.

I RECENTLY WOKE UP early to try and catch the peak of the Leonid meteor shower. Because the celestial event coincided with a full moon, the best time to view the meteors was at 5 a.m., just after moonset.
The estimates I read indicated that there were typically 11 to 17 meteors per hour during the peak. But there was no guarantee.
At 5 a.m., I got up and went to the front porch,

ONE OF MY FAVORITE tenets espoused on HumbleDollar is the emphasis on using our hard-earned money to buy experiences rather than possessions. As you get older, you feel like you have enough things. Indeed, my wife and I spent much of the past year getting rid of excess stuff when we downsized.
Meanwhile, the pandemic has put on hold some of the experiences we look forward to. Prior to 2020, in 24 of the previous 25 years,

OPEN ENROLLMENT begins in early November for many employees. This is a great time to see if you’re making the most of your workplace benefits, especially flexible spending accounts, or FSAs.
FSAs allow you to deduct pretax dollars from your paycheck for medical, adoption, commuting and dependent-care expenses. There are some new rules for the accounts this year in response to the pandemic.
First, the basics: During open enrollment, you tell your employer how many dollars you want deducted for these accounts over the next year.

MY WIFE AND I CONTINUE to modify our retirement plan in response to changes in our lives. Most of the changes have to do with the timing of both our retirements. But there’s also the puzzling question of which investment accounts we should draw on for income. More on that later.
First, a bit of background: I started receiving my pension at the end of 2017, after I stopped working fulltime. We expected to start drawing on our retirement savings in 2018.

AFTER THE DEATH of my father-in-law, I helped my mother-in-law organize and simplify their finances. One task I distinctly remember: taking her to the local bank, where she cashed in dozens of old savings bonds, some past their maturity date. It was a tedious process.
It wasn’t just my late father-in-law who failed to stay on top of such things. Last year, I discovered an envelope full of Series I savings bonds that I’d forgotten about.

IT’S OPEN SEASON for many of us—time to choose our health insurance for the year ahead. It’s a topic I got seriously interested in when I took over management of 500 mathematically astute engineers. They challenged me daily to understand how the various plans stacked up against each other. I spent a lot of time looking at various ways to assess the value of the different plan choices, and came up with a framework that worked for my family.

WE ALL HAVE OUR OWN indicators for where the cost of living is headed. These are the kinds of things that hit us viscerally. Last weekend, we had family visiting, and we decided to order pizza and wings. Two large pizzas, two dozen wings and an order of chicken tenders for our grandsons cost $103. A large pepperoni pizza alone was $26.
On Sunday morning, my wife and I took our two older grandsons out to breakfast.

I TURNED AGE 64 over the Labor Day weekend. One of my goals for my 65th orbit of the sun is to really dig into Medicare.
Luckily, I have a few friends and relatives who have blazed the trail before me. I’ve also studied Medicare as part of some financial planning courses I took a few years ago. Still, one topic I’ve never researched in detail is Medicare’s income-related monthly adjustment amount, otherwise known as IRMAA.

THERE’S A FAMOUS quote that’s often attributed to Thomas Jefferson: “I’m a great believer in luck, and I find the harder I work the more I have of it.”
Making your own luck is a concept I’ve long believed in, and have written about before. Clearly, luck plays a role in all human endeavors—finances especially. I’m particularly intrigued by the intersection of luck and hard work. But how exactly can we add to our store of good luck?

WE RECENTLY UPGRADED our home with smart locks, which open with a keypad code or cellphone command. After a bunch of research, we settled on Yale Assure Locks, which I’d also seen on an episode of This Old House. I’ve installed many locksets in the past, so I didn’t expect any problems.
Once they arrived, I gathered my tools, opened the packages and read the instructions. It seemed pretty straightforward. I set to work on the deadbolt,

WE’VE ALL BEEN looking for signs that the financial world is returning to some semblance of normalcy. I recently read a CNBC article that gave me hope. The article said that worldwide dividend payouts were expected to reach $1.39 trillion in 2021, almost back to pre-pandemic levels.
The data came from a report by Janus Henderson, a U.K. money manager. Dividends in this year’s second quarter increased 26% from 2020’s second quarter and were only 6.8% below 2019’s second quarter.

“SHOULD YOU BUY an annuity from Social Security?” That’s the title of a paper released by Boston College’s Center for Retirement Research (CRR) in May 2012. It’s one of the best articles I’ve ever read about the Social Security claiming decision—and it’s had a big impact on my thinking.
Most of us know what an income annuity is: You hand over a sum of money and, in return, receive a check every month for the rest of your life or for a specified period of time.

I’M WRITING THIS a few days after Hurricane Ida ravaged parts of our country. We were lucky. Our home here on the South Jersey coast was spared from all but minor rainfall. Much of Pennsylvania and North Jersey saw enormous amounts of rain, flooding and tornadoes. In my 64 years living in this region, I don’t recall there ever being this much severe weather, especially the number of tornadoes.
Prior to the hurricane landing in Louisiana,

I’VE BEEN KNOWN to overanalyze decisions, especially financial ones. When faced with a money question, often my first thought is to create a spreadsheet. While this brings groans from family and friends, I find them a great way to clarify my thinking and gain insights. Sometimes the resulting insights are glaringly obvious, and I get to laugh at myself.
My wife and I were looking to replace her nine-year-old SUV. We had read and heard that new car inventory was the biggest problem we’d face,

IT’S BEEN WIDELY reported that the Social Security Administration will likely announce a roughly 6% cost-of-living adjustment (COLA) for 2022. That would be the largest increase in monthly benefits since 1982, when retirees’ checks climbed 7.4%.
But the impact on retirees is more complicated than you might imagine. Boston College’s Center for Retirement Research recently published a paper entitled, “The Impact of Inflation on Social Security Benefits.” The paper investigates three ways that inflation interacts with benefits.

FINDING HIGH-QUALITY, affordable childcare has always been a challenge, but it became especially so during the pandemic. Suddenly, thousands of parents were working from home. Many childcare centers closed or restricted new enrollment. Our small South Jersey town saw an influx of families fleeing New York and Philadelphia. That put a strain on limited local resources, and spots for the summer have been hard to find.
I know a little about this because my youngest son and daughter-in-law have been struggling to find consistent childcare for their 17-month-old son James.

THE SOCIAL SECURITY Administration began rolling out a new, smaller annual statement on May 1. As reported in Think Advisor and other publications, a small percentage of online “my Social Security” account users, who aren’t currently receiving benefits, will get the new printed statement.
The new statement is two pages instead of four. One significant improvement is a graphic that shows what your estimated monthly benefit could be if you started taking benefits in any of the nine years between ages 62 and 70.

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?

OUR SOUTH JERSEY beach town transforms from empty to overrun during the summer. This past July 4th weekend was one of the busiest many of us had ever experienced. On these occasions, parking spaces go from a mass-produced commodity to the rarest of diamonds.
We had company for the weekend, so we had to park four cars instead of the usual three. Before the weekend, we grabbed a desirable spot in front of our house and vowed never to move it.

I RECENTLY WROTE about how my wife and I downsized to our beach home. It had long been a dream of ours and we’re thrilled it came about. Right after the move, we climbed on a plane and experienced another common dream of retirees—living in an exotic tropical paradise.
We visited our son, daughter-in-law, grandson and their Boston terrier in Nosara, Costa Rica. Nosara is a beautiful village and resort area carved out of the jungle on Nicoya Peninsula,

MY WIFE AND I DO a mid-year and year-end financial review. This includes an updated family balance sheet, cashflow analysis, portfolio review and a review of retirement projections.
I’m semi-retired and do some consulting when work is available. This income isn’t guaranteed, so I keep a spreadsheet that estimates our income and tax burden for the year. I usually update this quarterly to see if we need to submit any estimated state or federal tax payments.

A NEIGHBOR WAS recently telling me about the increasing amount of care he and his wife have to provide to his 90-year-old mother-in-law, and the challenges and expenses he expects in the near future.
I was able to offer some advice—because this is an area where my wife and I have significant experience. Together, we took care of her parents and mine, both medically and financially. If this is something you’re experiencing, or may soon,

AT A RECENT FAMILY event, some of the younger adults were asking their uncle what investments they ought to buy. The uncle is a veteran finance professional with a background in alternative investments.
The young men, all in their early 20s, were just starting their careers. They wanted his opinion on hot stocks, cryptocurrencies and nonfungible tokens (NFTs). One of them had recently made several hundred dollars buying and selling an NFT of an NBA image.

MANY DREAM OF retiring to the beach. My wife and I just did it. We recently sold our primary home outside Philadelphia and moved to our vacation home on the New Jersey Shore. The decision wasn’t easy. It was the result of a number of events coming together, including the pandemic, the hot real estate market and an attractive, but unexpected offer on our primary home.
We’d lived in our old home since 1994.

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.

MANY YEARS AGO, when I first developed an interest in financial planning, I read as much as I could on the subject. I distinctly remember being in a bookstore—remember them?—and looking at the myriad of personal finance books. Two stuck out.
The first book purported to show how to maximize your spending throughout retirement and die with nothing. The second book purported to help with the opposite strategy—leaving millions to your children. The stark dichotomy struck me then and it’s stayed with me ever since.

SOCIAL SECURITY is a crucial source of income for many retirees. But unfortunately, there’s also much confusion, because the ways benefits are calculated sure isn’t simple.
Want to learn more? To get started, I’d suggest heading to the Social Security Administration’s website and creating a free “my Social Security” account. For those currently receiving benefits, the website allows you to:

Verify your benefit payment amount
Get a replacement Social Security card
Get a replacement Medicare card
Change your address and phone number
Start or change direct deposit of your benefit payment
Get a replacement SSA-1099 or SSA-1042S for tax purposes

If you aren’t currently receiving benefits,

I RECENTLY WROTE about how, if you claim Social Security benefits before age 66 or 67, your monthly check could be reduced if your earned income is “too high.” Shortly after the article appeared, I ran into a colleague who was struggling with the issue.
My colleague had retired a few years back. He thought there might be some opportunities to do part-time consulting with our old employer. But nothing came of it during the first year he was retired,

WHEN OPPORTUNITY knocks, will you be ready? In the past 15 months, my wife and I have had two attractive but completely unexpected opportunities presented to us.
On Labor Day 2019, a neighbor at our New Jersey Shore house told us they were selling their home. They had bought a lot nearby and were planning to build a larger house to accommodate their growing brood of grandchildren. They knew my wife and I had a third grandson on the way,

THE 4% RULE HAS almost mythic status in the financial planning world. Originally suggested by Bill Bengen in a 1994 article, the rule provides a simple way for retirees to figure out how much they can withdraw from their portfolio without running out of money. In a recent article, Bengen updated his rule.
The rule defines the maximum amount retirees should withdraw from their portfolio in the first year of retirement. Got a $500,000 nest egg?

AS YOU STRIVE TO DO well, should you also strive to do good?
We’re seeing a boom in environmental, social and governance (ESG) investing. For instance, according to a recent Morningstar report, there are now 534 index mutual funds and exchange-traded funds (ETFs) around the world that screen their holdings using ESG criteria. Together, these funds have almost $250 billion in assets—more than twice the sum they had three years earlier.
ESG investing offers a way to invest in funds that consider issues such as the use of natural resources,

SOCIAL SECURITY IS the most important source of income for many retirees. Yet there’s also a lot of confusion, especially when it comes to how benefits are reduced if you continue working and how benefits are taxed. In fact, I’ve heard many folks confuse and conflate these two separate issues.
Want a refresher? Here’s a look at both topics:
Working while collecting. If you start Social Security benefits before you reach your full retirement age (FRA),

MANY FINANCIAL planners say they “stress test” portfolios. That sounds like a good idea, but it isn’t well defined. I decided to do some research to see how I could apply the notion to the investments owned by my wife and me.
I came across a number of useful articles. Investopedia, one of my go-to resources for all things financial, provides this definition: “Stress testing is a computer simulation technique used to test the resilience of institutions and investment portfolios against possible future financial situations.” Forbes,

ONE OF MY FAVORITE things to do is sit on our local beach with a cold beverage on a beautiful day, and talk finance with interested friends and family members. This past Labor Day weekend, I did just that with a soon-to-be retiree.
One of the big issues facing him and his wife: where to live. He had been relocated to New York by his employer. But he and his wife are natives of the Philadelphia region,

BACK IN AUGUST, Adam Grossman wrote a thought-provoking article about regret. He offered six strategies to minimize the chances you’ll end up kicking yourself for a choice you made. That got me thinking about the financial decision I most regret.
I bought a timeshare.
I know this admission will generate strong reactions in the personal finance community. I’d like to claim the ignorance of youth, but I was in my early 50s. I’d like to blame my wife,

WHAT’S YOUR CAPITAL gains tax rate? It’s a crucial number to know—and it could open the door to some big tax savings.
Most investors are aware that there’s a significant difference between the tax rate on short-term capital gains—investments held for a year or less—and that on long-term gains, those held more than a year. Realized short-term gains are dunned as ordinary income, just like your salary or any interest income you earn, while long-term appreciation gets taxed at a lower rate.

SOCIAL SECURITY retirement benefits are one of the most complicated topics in financial planning. As you try to figure out how much you might receive, there are thousands of rules, different types of benefit and numerous scenarios to evaluate.
And then there’s the impact of COVID-19.
It turns out that this year’s economic slump, which caused the economy to shrink by a tenth in the second quarter, may interact with Social Security’s methodology to hurt those who turn age 60 in 2020.

MY WIFE AND I BOUGHT our first home in the mid-1980s. We were thrilled to get an 8% mortgage, though we had to pay three points—an upfront fee equal to 3% of the loan amount—to get that rate. Many of our friends had bought a few years earlier and were paying 14%, a common occurrence back then, according to Freddie Mac data.
We kept our eyes open for opportunities to refinance our high rate.

THIS YEAR’S TAX DAY was the strangest I can remember. Amid the pandemic, the filing deadline had been pushed back to July 15, three months later than usual. And for me, it was our most complicated tax year ever. I had both retirement income and income from various in-state and out-of-state consulting gigs.
But the biggest complication stemmed from last year’s sale of our second home. This was a vacation home that we rented part-time and also used ourselves.

MANY OF US DREAM of owning a second home near the sea, a lake or the mountains. For my wife and me, that dream location was the southern New Jersey Shore. We’d both spent many vacations there as children and then did the same with our own growing family. We had visions of taking grandkids to the beach and boardwalk.
In March 2012, we realized our dream by purchasing a three-bedroom condo in Ocean City,

I’VE BEEN INVOLVED in settling five estates. They ranged from insolvent to almost seven figures. Some were well-organized, but one took significant time and effort to settle. These experiences taught me a key lesson: An organized and easily understood estate is a gift to those you leave behind.
I’m not an estate planning attorney. I’ve dealt with a few and found them to be professional, empathetic and helpful. If you have a complicated financial life or family situation,

MANY OF US HAVE found ourselves with free time on our hands. I’ve read that folks are filling their days with shopping, baking, exercising and binge-watching TV. May I suggest another activity, one that may prove profitable?
Over the past few years, I’ve found significant amounts of money in unlikely places. These treasures often come not just with monetary benefits, but also great memories. Here are four places to look:
1. Forgotten savings bonds.

ONE OF MY GOALS for 2020: develop a plan for doing Roth IRA conversions over the next 10 years. Once the money is out of traditional IRAs and in a Roth, it’ll grow tax-free. Problem is, the conversion means taking a tax hit today.
So why am I interested? There are several reasons: lowering lifetime taxes for my wife and me, creating the flexibility to manage future tax bills and leaving a tax-free inheritance to our children.

BEING STUCK AT HOME lends itself to some less-than-healthy habits, including binge watching TV, snacking at all hours and ignoring daily hygiene. One of the most tempting activities: online shopping.
I’m not normally a shopper, but even I can be lured by the thought of that daily delivery. Amazon, FedEx and UPS trucks go up and down my street all day long. With my older grandsons quarantined in California, buying and shipping a small treat to them—and then seeing their expressions of excitement via Zoom—is priceless.

IT’S TAX SEASON—NOT something many of us look forward to. Although HumbleDollar’s readers may be ready and willing to tackle their own taxes, many others approach Form 1040 with dread. I’ve seen that firsthand.
This has been my second year as a certified volunteer tax counselor for the AARP Foundation’s Tax-Aide program, which offers free tax preparation for low-to-moderate income taxpayers, especially those age 50 and older. Earlier this year, Tax-Aide was providing this service at nearly 5,000 locations nationwide,

WHEN STOCKS SLUMP, experts are often quick to advise investors to sit tight or, better still, buy more. But that won’t be the right advice for everybody.
Christine Benz, Morningstar’s director of personal finance and one of my favorite financial writers, recently penned an article listing five questions to ask yourself if you’re pondering whether to reduce your stock exposure during a bear market. I figured I’d work through the five questions—and see what I could learn about my own finances.

ONE OF MY FATHER’S favorite sayings was, “This too shall pass.” Recent events have made me dwell on its meaning—and wonder where the phrase came from.
It seems to have originated as a Persian adage. It was employed in a speech by Abraham Lincoln before he became the 16th president: “It is said an Eastern monarch once charged his wise men to invent him a sentence, to be ever in view, and which should be true and appropriate in all times and situations.

I’VE BEEN TRYING to imagine what the immediate future will look like. How do we make sense of a situation where we seem to have so little control? You hear estimates of a few weeks to 18 months before things get back to normal.
I’ll admit I’ve lately had many sleepless nights worrying about all of this. How can we think about the financial implications in an organized way? It strikes that maybe we should ponder the financial issues we currently face in the same way we think about retirement.

WE OFTEN PREPARE our taxes, only to learn we owe a substantial sum to Uncle Sam. Most of us believe we can’t do much about this—and yet there’s one simple fix available to many taxpayers: Make a tax-deductible retirement account contribution this year for 2019.
Indeed, thanks to the stock market’s decline, this is a great time to shovel more money into your retirement accounts—and you may discover you can add to more than one account.

WHEN MY YOUNGEST son graduated college, he had two solid job offers. One would have allowed him to live at home for free and the other was halfway across the country. Guess which one he picked?
In fairness, the job far from home was more interesting to him and provided a great start to his career. I remember him sitting down with his mother and me, and telling us he was planning to move to Texas.

NONE OF US WANTS to contemplate our own mortality. But we all need to think about it—including thinking about life insurance.
I was lucky enough to have a long tenure with a large company that provided term insurance at reasonable prices. My employer provided two times our salary in coverage and we had the option to purchase additional coverage equal to eight times salary. I was also able to buy insurance on my wife’s life equal to three times my salary.

ONE OF MY FAVORITE movies of recent years was Hidden Figures. There’s a pivotal scene where the hero, Katherine Johnson, realizes they need to use an ancient numerical technique known as Euler’s Method to solve the trajectory equations for John Glenn’s mission. This involves breaking a complex problem into very small pieces, solving each part, and then summing them to get the solution.
Over my engineering career, I used various numerical integration techniques to solve complicated problems.

FROM AN EARLY AGE, I was amazed at the power of mathematics to model our world and solve real world problems. In engineering school, we studied a host of mathematical techniques that did just that. But I wish we’d spent more time on probability and statistics.
In 1989, I read a book that gave me a broader view of how probabilistic our world is and, at the same time, made me aware of how ill-prepared the general population is to understand these concepts.

I’M A BIG FAN OF health savings accounts, or HSAs. They’re becoming more popular as a way to pay for medical costs—and, in the right circumstances, they can also be a valuable addition to your retirement plan.
What’s so great about HSAs? If used properly, they’re triple tax-favored. You get a tax deduction when you deposit funds. The growth thereafter is tax-deferred. And if you use distributions to pay for qualified medical expenses, withdrawals are tax-free.

IT’S THAT TIME of the year—when we should all reevaluate how much we’re saving in our employer’s 401(k). The 2020 contribution limit is $19,500, up $500 from 2019’s level. For those age 50 and older, the catchup contribution was also raised by $500, to $6,500, so these folks can invest as much as $26,000 in 2020.
In addition, it’s a good time to check we’re getting the most out of our 401(k). What are the rules on the employer match?

MY WIFE AND I SPENT Thanksgiving on the Outer Banks of North Carolina. For 25 straight years, we’ve gathered there with my wife’s extended family to spend the week of Thanksgiving at the beach.
It started with about 15 of us in 1994, all in a seven-bedroom house. Over the years, the family—and the size of the house—have grown significantly. This year, we had 39 in attendance, representing four generations. For the past five years,

FALL IS MY FAVORITE time of year, but there used to be one thing I dreaded: picking a health plan for the year ahead.
Many folks don’t know how to evaluate their health insurance options. I used to be in that group—until I adopted a fairly straightforward process. Bear with me while I walk you through the sort of choice you might face as an employee. The same analysis can be used if you’re buying insurance on your own.

WHEN I WAS IN THE workforce, it was easy to give to charity. Now that I’m semi-retired, it seems like more of a struggle—for four reasons:

Because I’m no longer employed fulltime, I can’t donate through payroll deduction, which used to make giving simple and automatic.
Leaving fulltime employment often results in reduced or uncertain income, and sometimes both. Today, I find it harder to know how much I can afford to give.
Retirement heightens thoughts of leaving a legacy to children and other heirs.

SHORTLY AFTER I retired in March 2017, I was asked to consult on some projects. I knew it was going to be a more complex tax year than I’d faced before. I had earned income from my previous employer, pension income and self-employment income from my consulting.
On top of all that, my wife started a new fulltime job the Monday after I retired. We switched to her benefits, but her company didn’t have a high-deductible health plan with an HSA,

A DECADE AGO, a large financial firm ran a clever advertising campaign that showed people going about their everyday lives carrying a bright orange six- or seven-figure sum that represented their number—how much money they needed to retire. It was clever because we humans like to simplify—and sometimes oversimplify—complicated issues. It’s one of our cognitive biases.
I spent almost 40 years in aerospace engineering. I did a lot of detailed engineering analyses, calculating expected performance numbers,

I’M ONE OF THOSE lucky folks whose employer had a traditional defined benefit pension plan. I worked in the aerospace industry, starting with GE in the 1980s. Various mergers led to us to become part of Lockheed Martin. Through these multiple sales and mergers, our benefits and pension plan stayed largely the same, though—to be honest—I didn’t pay a lot of attention in my early years and was only vaguely aware of the details.

MY FATHER-IN-LAW Jim was born in January 1927, the sixth of eight children, to an Irish-American couple in Philadelphia. During the Second World War, his three older brothers were in the armed services. That meant that Jim, barely age 16, had to quit high school and enter the work world, so he could earn an adult’s wage. His salary must have been critical to the family’s economic stability.
Jim’s brother Bill was killed in an accident at sea during ship maintenance in 1944,

FOR MUCH OF MY adult life, my view of financial planning was similar to that of many others: Simply put, financial planning equaled investment management.
I spent my career in aerospace engineering, surrounded by highly educated, mathematically competent colleagues. I was lucky enough to span the transition from defined benefit pension plans to defined contribution plans. My colleagues and I closely followed the market’s performance, our own company’s shares and emerging tech stocks. Some of the more mathematically inclined dabbled in options.