Given that Mike Piper is a big part of this discussion, I will note that he has disputed describing the 8%-per-year increase in Social Security benefits after Full Retirement Age as an 8% return. Here is a link to his 2020 post on the subject: https://articles.opensocialsecurity.com/8-return/ Key excerpts: "To know the actual return you would get from delaying Social Security, we’d have to know how long you will live (and how long your spouse will live, if you’re married). ... (W)e can calculate an expected return based on life expectancies. But that figure turns out to be nowhere near 8% in most cases. For an average unmarried male, the expected return from waiting to file for Social Security works out to about 1.8% above inflation. For an average unmarried female, it’s about 3% above inflation. For a married person, it depends on the difference in ages between the two spouses as well as the difference in primary insurance amounts. (In short, it’s usually significantly higher for the higher earner in the couple and lower for the lower earner in the couple.)"
Garrison Keillor, in a "News From Lake Wobegon" monologue many years ago, cited his mother's cautionary phrase to him and his five siblings when guests were invited for dinner: "Family, Hold Back." My wife and I have half-seriously adopted that phrase at times.
The column needs an update of this sentence (an update that Jonathan OK'd, by the way): "If you purchase coverage through your state or the federal government’s health-insurance exchange, you could receive a tax credit if your income, based on family size, is four times the federal poverty level or less." The past few years have seen legislative enhancements of Affordable Care Act eligibility and coverage. The premium tax credit's eligibility cutoff (aka, the "cliff") had been 400% of the federal poverty level for years; for a family of three in 2024, that would be $103,280.
However, that cliff was temporarily eliminated in 2021 to expand eligibility to higher-income households. In my two-person household, if we have an adjusted gross income of $100,000 in 2025, I would get a tax credit of $328 a month. Without a tax credit, my 2024 high-deductible/HSA-eligible plan would have a full premium of just over $1,000 a month in 2025.
As AGI rises, the 2025 tax credit for my household shows a glide path down until it zeroes out at an AGI above $146,000. (Your numbers are likely to vary.)
The expansion of eligibility and the enhancements of subsidies are to expire at the end of 2025 -- if the new powers-to-be in D.C. don't change anything during the year.
My wife and I both retired from our final newspaper editing positions by layoffs, she in January 2016 as a part-timer at age 59, and I in 2020 as a full-timer at 57. I had never had a retirement age as a goal and figured that if I ever won the lottery (highly unlikely, as I never play), I'd keep working while keeping it secret as long as possible. Well, as a result of decades of saving diligently, investing while benefiting from decades of a bull market, good luck, good health, etc., I decided that we had in effect won the financial lottery, despite neither of us ever coming close to earning six figures. I looked on the layoff as an unsought blessing because the newspaper industry, and my employer in particular, were making the daily grind unpleasant to the point that at times I dreaded it. In the three months between the announcement that my newsroom unit was being eliminated and the layoff date, I began a crash course in Social Security, Medicare, Obamacare, and other subjects that had lurched from theoretical to intensely personal. I continued to job hunt, twice nearly landing jobs that would have been a step up from my final job, but eventually I decided that I was retired -- with the exception of an 11-month position outside the newspaper world that I took much later, partly because it offered health insurance. I don't regret my decisions. I was more reactive than proactive, but I am content where we are at. Unplanned "early" retirement suits me.
Speaking of TIPS Watch, as I noted to Jonathan on Sunday, the site relayed the news that the IRS is ending the option of buying paper I bonds with a tax refund. I can say from experience that it was a hassle for buyers. https://tipswatch.com/2024/09/01/treasury-is-ending-paper-i-bonds-as-a-tax-refund/
As a reader, I, too, am initially disappointed when I hit a paywall. But as a retired newspaper journalist married to another one, and knowing that our editor and assistant editor also spent many years in newsrooms, I have to ask: How else should journalists (and writers) should be paid to produce the articles you are so eager to read? Should what the free press produces be free? Someone has to pay, and the internet has killed newspaper advertising and the industry itself. I have online subscriptions to The Wall Street Journal and The Washington Post, and I share gift articles from them with friends, as is allowed. I am a library user/taxpayer and sometimes make use of its print copies of newspapers. Until journalists figure out a business model that works, especially to fund local news -- and they have been trying for decades -- our country/society will suffer.
"As you might imagine, my future wife wasn’t as enamored with the hydrocarbon-based version." That mention of hydrocarbon reminded me of a seasonal Washington Post headline on an Opinion piece I saw a couple of days ago: Why giving roses on Valentine’s Day — or any day — is really a bad idea. I can summarize the story this way: Eighty percent of the flowers sold in the U.S. are imported, most from Colombia and Ecuador. To keep them fresh, the flowers are chilled into a dormant state and then moved to airports in refrigerated trucks. During the weeks prior to Feb. 14, more than 30 flights will move flowers from Colombia to Miami — every day. They are moved into chilled warehouses and inspected by U.S. customs, then loaded onto refrigerated trucks for delivery to U.S. stores as soon as 48 hours after being picked. ... Flowers might be the perishables most damaging to the climate because nearly everything else moves by ship, which has 1 percent the carbon footprint of air freight. (The story pans roses, chrysanthemums, and carnations, which together make up the vast majority of imported flowers. It suggests U.S.-grown specialty flowers such as sunflowers, dahlias, zinnias, peonies, and snapdragons. They are more delicate and don’t travel well over long distances.) But will your significant other buy in?
I similarly snail-mailed my first mutual fund investment checks -- totaling a whole $3.5K divided among four funds, each in a different fund family (wow) -- around the Aug. 25, 1987, peak of the S&P 500. Two months later, the crash focused my attention, but I just chronicled my loss and began buying shares every month, despite the advice of a friend to get out. I had tiptoed in for the long haul at age 24, and I stuck to that, to my great benefit. Crashes are great teachers, if you strive to learn from them. Your perspective matters, too. And a bit of optimism, tempered by prudence, always helps.
Comments:
Given that Mike Piper is a big part of this discussion, I will note that he has disputed describing the 8%-per-year increase in Social Security benefits after Full Retirement Age as an 8% return. Here is a link to his 2020 post on the subject: https://articles.opensocialsecurity.com/8-return/ Key excerpts: "To know the actual return you would get from delaying Social Security, we’d have to know how long you will live (and how long your spouse will live, if you’re married). ... (W)e can calculate an expected return based on life expectancies. But that figure turns out to be nowhere near 8% in most cases. For an average unmarried male, the expected return from waiting to file for Social Security works out to about 1.8% above inflation. For an average unmarried female, it’s about 3% above inflation. For a married person, it depends on the difference in ages between the two spouses as well as the difference in primary insurance amounts. (In short, it’s usually significantly higher for the higher earner in the couple and lower for the lower earner in the couple.)"
Post: Open Social Security – interesting finding on optimization and mortality tables
Link to comment from January 15, 2025
Garrison Keillor, in a "News From Lake Wobegon" monologue many years ago, cited his mother's cautionary phrase to him and his five siblings when guests were invited for dinner: "Family, Hold Back." My wife and I have half-seriously adopted that phrase at times.
Post: Pass the mashed potatoes by Quinn
Link to comment from December 30, 2024
The column needs an update of this sentence (an update that Jonathan OK'd, by the way): "If you purchase coverage through your state or the federal government’s health-insurance exchange, you could receive a tax credit if your income, based on family size, is four times the federal poverty level or less." The past few years have seen legislative enhancements of Affordable Care Act eligibility and coverage. The premium tax credit's eligibility cutoff (aka, the "cliff") had been 400% of the federal poverty level for years; for a family of three in 2024, that would be $103,280. However, that cliff was temporarily eliminated in 2021 to expand eligibility to higher-income households. In my two-person household, if we have an adjusted gross income of $100,000 in 2025, I would get a tax credit of $328 a month. Without a tax credit, my 2024 high-deductible/HSA-eligible plan would have a full premium of just over $1,000 a month in 2025. As AGI rises, the 2025 tax credit for my household shows a glide path down until it zeroes out at an AGI above $146,000. (Your numbers are likely to vary.) The expansion of eligibility and the enhancements of subsidies are to expire at the end of 2025 -- if the new powers-to-be in D.C. don't change anything during the year.
Post: A Taxing Retirement
Link to comment from November 16, 2024
My wife and I both retired from our final newspaper editing positions by layoffs, she in January 2016 as a part-timer at age 59, and I in 2020 as a full-timer at 57. I had never had a retirement age as a goal and figured that if I ever won the lottery (highly unlikely, as I never play), I'd keep working while keeping it secret as long as possible. Well, as a result of decades of saving diligently, investing while benefiting from decades of a bull market, good luck, good health, etc., I decided that we had in effect won the financial lottery, despite neither of us ever coming close to earning six figures. I looked on the layoff as an unsought blessing because the newspaper industry, and my employer in particular, were making the daily grind unpleasant to the point that at times I dreaded it. In the three months between the announcement that my newsroom unit was being eliminated and the layoff date, I began a crash course in Social Security, Medicare, Obamacare, and other subjects that had lurched from theoretical to intensely personal. I continued to job hunt, twice nearly landing jobs that would have been a step up from my final job, but eventually I decided that I was retired -- with the exception of an 11-month position outside the newspaper world that I took much later, partly because it offered health insurance. I don't regret my decisions. I was more reactive than proactive, but I am content where we are at. Unplanned "early" retirement suits me.
Post: Time’s Up
Link to comment from November 15, 2024
The TIPS Watch site does extensive math -- more than I care to get into -- on TIPS and I Bonds, so I'd look there for the answers you need.
Post: David Enna’s Tipswatch.com tribute to Bob Brinker
Link to comment from September 5, 2024
Speaking of TIPS Watch, as I noted to Jonathan on Sunday, the site relayed the news that the IRS is ending the option of buying paper I bonds with a tax refund. I can say from experience that it was a hassle for buyers. https://tipswatch.com/2024/09/01/treasury-is-ending-paper-i-bonds-as-a-tax-refund/
Post: David Enna’s Tipswatch.com tribute to Bob Brinker
Link to comment from September 4, 2024
I am a WaPo subscriber. Here's the gift link; I hope it works: https://wapo.st/476evJZ
Post: Jonathan in Washington Post this am.
Link to comment from August 28, 2024
As a reader, I, too, am initially disappointed when I hit a paywall. But as a retired newspaper journalist married to another one, and knowing that our editor and assistant editor also spent many years in newsrooms, I have to ask: How else should journalists (and writers) should be paid to produce the articles you are so eager to read? Should what the free press produces be free? Someone has to pay, and the internet has killed newspaper advertising and the industry itself. I have online subscriptions to The Wall Street Journal and The Washington Post, and I share gift articles from them with friends, as is allowed. I am a library user/taxpayer and sometimes make use of its print copies of newspapers. Until journalists figure out a business model that works, especially to fund local news -- and they have been trying for decades -- our country/society will suffer.
Post: Monday is a good day for a rant. Let’s talk everything annoying. People, money, people
Link to comment from July 27, 2024
"As you might imagine, my future wife wasn’t as enamored with the hydrocarbon-based version." That mention of hydrocarbon reminded me of a seasonal Washington Post headline on an Opinion piece I saw a couple of days ago: Why giving roses on Valentine’s Day — or any day — is really a bad idea. I can summarize the story this way: Eighty percent of the flowers sold in the U.S. are imported, most from Colombia and Ecuador. To keep them fresh, the flowers are chilled into a dormant state and then moved to airports in refrigerated trucks. During the weeks prior to Feb. 14, more than 30 flights will move flowers from Colombia to Miami — every day. They are moved into chilled warehouses and inspected by U.S. customs, then loaded onto refrigerated trucks for delivery to U.S. stores as soon as 48 hours after being picked. ... Flowers might be the perishables most damaging to the climate because nearly everything else moves by ship, which has 1 percent the carbon footprint of air freight. (The story pans roses, chrysanthemums, and carnations, which together make up the vast majority of imported flowers. It suggests U.S.-grown specialty flowers such as sunflowers, dahlias, zinnias, peonies, and snapdragons. They are more delicate and don’t travel well over long distances.) But will your significant other buy in?
Post: In the Doghouse
Link to comment from February 14, 2024
I similarly snail-mailed my first mutual fund investment checks -- totaling a whole $3.5K divided among four funds, each in a different fund family (wow) -- around the Aug. 25, 1987, peak of the S&P 500. Two months later, the crash focused my attention, but I just chronicled my loss and began buying shares every month, despite the advice of a friend to get out. I had tiptoed in for the long haul at age 24, and I stuck to that, to my great benefit. Crashes are great teachers, if you strive to learn from them. Your perspective matters, too. And a bit of optimism, tempered by prudence, always helps.
Post: Still Above Ground
Link to comment from February 9, 2024