MY WIFE AND I JUST finished watching the Netflix documentary Live to 100, which I highly recommend. The four-part series focuses on Dan Buettner’s study of pockets of people around the world who achieve amazing longevity, including many residents who live to age 100 and beyond.
The seven longevity locations include Okinawa, Japan; Sardinia, Italy; Ikaria, Greece; Nicoya, Costa Rica; and Loma Linda, California. These locations of long-lived people have been labeled “blue zones” based on the seminal demographic work on Sardinia by Giovanni Mario Pes,
ONE RECENT TREND among newly minted retirees: unretirement. According to an AARP study, some 3% of retirees are back in the workforce one year later, taking on either fulltime or part-time jobs. Often, unretiring wasn’t part of the retiree’s original plan—but we shouldn’t assume it’s necessarily about needing money.
Starbucks’s Howard Schultz, quarterback Tom Brady and Disney’s Bob Iger are poster children for unretiring. Even our HumbleDollar world includes many examples of those who have reinvented,
THE DOUBLE-DIGIT recovery by the S&P 500-stock index this year has been driven almost entirely by seven mega-cap stocks: Apple, Google, Microsoft, Amazon, Meta, Tesla and Nvidia. In fact, these seven stocks now comprise more than 25% of the index.
Since our family is heavily invested in a mix of the S&P 500, U.S. technology and growth funds, plus some individual tech stocks, I began to worry about our portfolio’s investment concentration. I tallied our positions in these seven stocks across all our accounts.
MY DAYS WRITING for HumbleDollar may be numbered. I recently started playing with Google’s Bard, OpenAI’s ChatGPT and Microsoft’s version of the ChatGPT artificial intelligence (AI) platform, and was curious to see how they might perform in providing basic financial guidance. Their answers were generally sensible and aligned with HumbleDollar’s approach—though also occasionally flawed.
You might think that AI can’t possibly replace articles penned by contributors, since the charm of HumbleDollar is the contributors’ personal stories.
IF YOU’RE IN YOUR 60s or older and making sizable Roth conversions, it isn’t just income taxes that you need to worry about. You may also trigger much higher Medicare Part B and Part D premiums.
We’re talking here about those Medicare surcharges known as IRMAA, short for income-related monthly adjustment amount. These surcharges are over and above 2023’s standard $1,979 per person Medicare premium, and they’re based on income from two years earlier.
IN AN EFFORT TO identify the simplest, most resilient lifetime investment portfolio, author and investment analyst Chris Pedersen concluded that a minimum of two funds is required. His recent book, 2 Funds for Life, summarizes his back-testing study to find a simple yet effective portfolio. The book is available free at PaulMerriman.com.
Pedersen found that a 90% allocation to a Vanguard Group target-date fund coupled with a 10% allocation to a small-cap value fund provides meaningful diversification across stocks and bonds,
IN MY ONGOING EFFORT to reduce our accumulated stuff, I was trolling through our collection of old thumb drives to see what I should download, save or toss. Among them, I discovered the 258-page presentation from a two-day retirement course that my old employer sponsored in 2006.
I wondered how the advice had—17 years on—stood the test of time. As I reviewed it, I found some excellent suggestions and some that were lacking, though I hesitate to fault the presentation’s authors.
JEFF BEZOS ONCE asked Warren Buffett why everyone doesn’t just copy his example when investing. Buffett famously replied, “Because nobody wants to get rich slowly.”
The magic of saving diligently, coupled with decades of compounding inside tax-advantaged accounts, can ensure financial freedom. In fact, young married couples today have an outside chance of accumulating $10 million by the time they reach the new required minimum distribution age of 75.
To reach the $10 million jackpot,
WHAT DO BEN FRANKLIN, Charles Darwin and David Cassidy all have in common? All have advised us not to waste life’s precious time.
Almost everything about money translates into time. Money can buy us time—either more free time or more time spent on higher-value activities. Money can purchase a nicer house or car, a luxury vacation, greater financial support for our children, fun toys or experiences, reduced financial stress—and, eventually, a comfortable retirement. The financial independence-retire early,
AS IF WE DIDN’T already have enough evidence, here’s further proof that stock market predictions have little value: A year ago, 24 highly regarded stock market pundits forecasted that the S&P 500 would close out 2022 at 4,904, according to data posted by CNBC’s Brian Sullivan. That 4,904 was the average, with their predictions ranging from a low of 4,400 to a high of 5,330. The S&P 500’s actual 2022 close was 3,840.
THE TWO SECURE ACTS—2019’s and 2022’s—may inadvertently increase the federal and state tax rates on tax-deferred retirement accounts, such as 401(k)s, 403(b)s and IRAs. While well-intentioned, the laws result in required withdrawals being bunched into fewer years—which could push people into higher tax brackets. But there are ways this tax toll might be lightened or avoided, as you’ll see.
With tax-deferred accounts, the normal advice is to delay taxable distributions for as long as possible to give more time for investment growth.
THREE YEARS AGO, I wrote an article suggesting I had 7,000 days to go, at least according to the Social Security Administration’s life expectancy calculator. The 1,000 days since then represented a significant 14% share of my remaining actuarial life.
The good news is, the Social Security calculator now estimates that my life expectancy is about 6,400 days. I’ve enjoyed 1,000 days of life but only used up 600 days of life expectancy. That’s like a 40% return on life over the past three years.
OVER THE PAST FEW weeks, my wife and I did something we hadn’t done in four years: We bought bonds.
Specifically, we parked some money in one- to two-year Treasurys paying 4.3% to 4.6%—the highest rates in 15 years. Our portfolio now approaches 5% bonds, and we plan to buy more. We’re waiting to capture higher rates following the expected Federal Reserve rate increases.
Bonds represent a seismic shift for us. In early 2020,
IN MY FIRST ARTICLE for HumbleDollar nearly four years ago, I said I’d claim Social Security benefits at my full retirement age of 66 and two months. By claiming mid-way between 62 and 70, I intended to hedge my bets, because I couldn’t know such relevant variables as my lifespan or future tax rates, inflation rates and investment returns.
And I did indeed claim Social Security recently, though—full disclosure—it was nine months after my full retirement age.
THE WILLS, POWERS of attorney and advance directives drawn up for my wife and me were drafted according to the laws of another state—and were badly out-of-date.
For example, these various documents included guardianships for our then-young children, with a trust to make gradual payouts until they turned age 35. Both our children have since graduated college, become professionally employed and demonstrated they’re financially responsible.
Despite all that, I’m embarrassed to admit that we procrastinated over getting new wills.