AUTHOR: John Katz on 2/27/2025 FIRST: Jonathan Clements on 2/27 | RECENT: 1michaelm on 3/5
Comments
This reminds me a bit, of a Bruce Springsteen song, Badlands: "Poor man wanna be richRich man wanna be kingAnd a king ain't satisfied'Til he rules everything" There is a real tension in life between spending time enjoying what you already have, vs spending time striving for something new. I don't pretend to know where to draw that line. But you are providing a public service, Jonathan, to remind us to think about it. Because it matters.
I would be stunned if Congress voted to reduce benefits for current SS recipients. That would be political suicide. Congress is all about getting re-elected. Everything else comes after that. And every senior in the U.S. would attempt to vote them out for reducing SS benefits. But, as the math indicates, something will need to be done. As with every other major problem confronting this country, our government will wait until the last minute to address it.
Yes, Jonathan. The matter of one's risk tolerance has moved from a theoretical matter - to a very practical matter - over the course of just a few days.
For people that don't feel comfortable being 'wealthy', however they define it, there is a simple solution. If the discomfort is sincere and sufficiently intense, give away your money until you no longer feel you are wealthy. On a related note, we never hear about people being uncomfortable with -- or being denounced by others for -- being nice, or handsome, or funny, or smart, or kind, or loyal, or generous, or athletic, or religiously devout, etc., - why is that? I understand these are more or less inherent traits, but they are developed/enhanced over one's life, and are of little value unless applied. My point is there are a limitless number of advantages, or gifts, one can be afforded. Why some people have these in larger quantities than others is a mystery not to be understood in this life. Wealth, however defined, is simply one of them, and not to me at least, anywhere near being the most valuable or desirable.
I don't personally know anyone who believes they should be exempt from paying taxes. I know a lot of people who think the rate they pay, particularly for property taxes, is much too high. Moreover, at least in my county, increases sought by the school board are nearly almost always rubber stamped. During my career, if I wanted to create a new position, or start a new project, I had to document the heck out of why it was necessary, and how it would benefit my employer. And ... if a position or project was no longer creating the impact it was designed to produce, I was required to document why it should continue to exist. I was held to account. I see NONE of that with my local school board. There has been no correlation between increases in money spent and student performance. And for the very most part, the numbers demonstrate that across the country. The U.S. is near the top of the charts in terms of spend/student, and we are near the middle in terms of outcome. That should be unacceptable. If the readers of Humble Dollar routinely paid the highest fees to invest in certain funds only to have them produce middling results, they would be the first to dump those funds for more efficient ones. Yet we are supposed to be support ever increasing property taxes to support schools that, for the very most part, fail to improve student outcomes? Really? Is it my patriotic duty to look the other way when the government - federal, state or local - is not accomplishing what it said it would with tax dollars? So when I am asked to continually funnel more money in the form of property taxes to our schools, yes, I object. The process is broken. I want more up-front scrutiny in terms of why the new funds are necessary, and I want accountability for what impact the money is having on student outcomes. I don't mind paying taxes, even high rates of taxes, if the money generates the outcomes promised.
I worry about running out of good health much more than I worry about running out of money. I feel the pressures of time now for the first time in my life.
Great stuff, all around. Thank you, Jonathan. A couple of points:
Even if you had thought to include advice in the 80s directed at all areas of life, financial and otherwise, I don't think you would have been nearly as well equipped as now. That advice is the result of living life, and reflecting effectively on what you have learned. And how to communicate it, of course.
On the topic of 'talking it through', and being estranged from others, I have observed that the majority of families in my orbit suffer from one or more of these estrangements. The majority! And often the people involved think there is no urgency to correct these situations. I had two family members in that state, and one of whom recently died without warning. The surviving family member is struggling with how things were left between them. There had been years and years to try to fix things -- but it never occurred. That regret will likely last the rest of the surviving family member's life. I think making a genuine attempt at patching things up - whether successful or not - would make for an easier time on the surviving party.
I think we're dealing with two different issues here, Jonathan. And I think both of our points are valid, but let's see what you think.
I think you are saying it's clearly far better to have one's annual expenses in hand when figuring out how the 4% rule works. Sounds like you are recommending starting with those expenses, subtract out any income like pensions and social security, and use that remaining number in your 4% calculation. E.G., Total expenses for the couple of $100,000 per year. Combined pension/social security of $50,000. That leaves $50K to be funded through the retirement accounts. If the couple has a combined $1,000,000 in retirement savings, then $1,000,000 x 4% is $40,000. So in this instance, the couple would have 'enough' to last 30 years, with a 'cushion' of $10,000. *For the sake of simplicity, I'm assuming expenses remain stable. But it's important to note that in the above example, the couple's combined sources of income and expenses and retirement accounts are being considered.
However, in terms of the 4% rule as a back of the envelope exercise, they are not being considered. Would you agree with me the generic 4% rule is deficient in terms of failing to take into account the impact of a couple? I acknowledge that the deficiency is cured when one uses detailed expenses for the couple, as you recommend. But I also feel that when such articles feature this 4% approach, the authors need to call out that it needs modification when dealing with couples -- which to my experience, the authors of such pieces do not do.
Comments
This reminds me a bit, of a Bruce Springsteen song, Badlands: "Poor man wanna be rich Rich man wanna be king And a king ain't satisfied 'Til he rules everything" There is a real tension in life between spending time enjoying what you already have, vs spending time striving for something new. I don't pretend to know where to draw that line. But you are providing a public service, Jonathan, to remind us to think about it. Because it matters.
Post: Don’t Push It
Link to comment from April 11, 2025
I would be stunned if Congress voted to reduce benefits for current SS recipients. That would be political suicide. Congress is all about getting re-elected. Everything else comes after that. And every senior in the U.S. would attempt to vote them out for reducing SS benefits. But, as the math indicates, something will need to be done. As with every other major problem confronting this country, our government will wait until the last minute to address it.
Post: RDQ There is so much to rant about these days. Let’s go for the people who don’t believe facts-perhaps about Social Security
Link to comment from April 10, 2025
Yes, Jonathan. The matter of one's risk tolerance has moved from a theoretical matter - to a very practical matter - over the course of just a few days.
Post: Risky Business – Challenging Times
Link to comment from April 7, 2025
For people that don't feel comfortable being 'wealthy', however they define it, there is a simple solution. If the discomfort is sincere and sufficiently intense, give away your money until you no longer feel you are wealthy. On a related note, we never hear about people being uncomfortable with -- or being denounced by others for -- being nice, or handsome, or funny, or smart, or kind, or loyal, or generous, or athletic, or religiously devout, etc., - why is that? I understand these are more or less inherent traits, but they are developed/enhanced over one's life, and are of little value unless applied. My point is there are a limitless number of advantages, or gifts, one can be afforded. Why some people have these in larger quantities than others is a mystery not to be understood in this life. Wealth, however defined, is simply one of them, and not to me at least, anywhere near being the most valuable or desirable.
Post: I don’t feel comfortable being “wealthy”
Link to comment from April 2, 2025
Practice kindness. Paradoxically, it will benefit you even more than the recipients of your kindness.
Post: Help Wanted
Link to comment from March 25, 2025
How would you propose measuring outcomes then? How does America assess the return on its investment in public education?
Post: Like it or not, we all need to pay taxes. Seniors are no exception. Everyone in the pool.
Link to comment from March 17, 2025
I don't personally know anyone who believes they should be exempt from paying taxes. I know a lot of people who think the rate they pay, particularly for property taxes, is much too high. Moreover, at least in my county, increases sought by the school board are nearly almost always rubber stamped. During my career, if I wanted to create a new position, or start a new project, I had to document the heck out of why it was necessary, and how it would benefit my employer. And ... if a position or project was no longer creating the impact it was designed to produce, I was required to document why it should continue to exist. I was held to account. I see NONE of that with my local school board. There has been no correlation between increases in money spent and student performance. And for the very most part, the numbers demonstrate that across the country. The U.S. is near the top of the charts in terms of spend/student, and we are near the middle in terms of outcome. That should be unacceptable. If the readers of Humble Dollar routinely paid the highest fees to invest in certain funds only to have them produce middling results, they would be the first to dump those funds for more efficient ones. Yet we are supposed to be support ever increasing property taxes to support schools that, for the very most part, fail to improve student outcomes? Really? Is it my patriotic duty to look the other way when the government - federal, state or local - is not accomplishing what it said it would with tax dollars? So when I am asked to continually funnel more money in the form of property taxes to our schools, yes, I object. The process is broken. I want more up-front scrutiny in terms of why the new funds are necessary, and I want accountability for what impact the money is having on student outcomes. I don't mind paying taxes, even high rates of taxes, if the money generates the outcomes promised.
Post: Like it or not, we all need to pay taxes. Seniors are no exception. Everyone in the pool.
Link to comment from March 17, 2025
I worry about running out of good health much more than I worry about running out of money. I feel the pressures of time now for the first time in my life.
Post: What Worries You? By Jonathan Clements
Link to comment from March 14, 2025
Great stuff, all around. Thank you, Jonathan. A couple of points:
Post: Four Thoughts
Link to comment from March 1, 2025
I think we're dealing with two different issues here, Jonathan. And I think both of our points are valid, but let's see what you think.
Post: How does the 4% Rule Change Assuming A Couple in Retirement?
Link to comment from February 27, 2025