normr60189

Comments

• Why track spending? Managing lifestyle creep is one reason.   This all would seem unnecessary for older people in the situation with adult, independent children, little or no debt and a paid-off mortgage, established retirement plans and access to social security benefits or pensions.  For younger workers the situation is very different.   Frankly, managing personal finances and saving something, anything, consistently seems most important to me.  I’m coming from the position of someone who had zero retirement savings at age 49, had a negative cash flow and was in debt.  How I got into that situation was not entirely of my own doing and that isn’t the issue. Building a new life out of the ruins was my challenge.  While 15% can be a difficult savings goal, it is one of the reasons I suggest avoiding debt. Now, we could argue about good versus bad debt, but all interest paid on debt is diverted from savings.  “Many younger workers are entering adulthood in a high-cost environment, where rent, groceries and insurance take up a larger share of their income. At the same time, student loan payments have resumed, and building emergency savings often feels more urgent than long-term investing…….  There is also a structural shift underway. More Gen Z workers are earning income through freelance work, gig jobs or contract roles, positions that typically do not come with employer-sponsored retirement plans. “ – Kiplinger 4/9/2026 However, starting young (age 23) and saving $3,000 annually and consistently will build a $790,000 portfolio by age 65 at 7% annual return. An employer match obviously increases this. Note that $3,000 is 15% of a $20,000 annual income.  It would seem this is a realistic goal IF earnings cover expenses.   Lower income or an inverted financial situation (high expenses) requires expense tracking. Eventually, as expenses decrease, progress to budgeting. Why? Because lifestyle creep is one way to sink a financial plan.   According to the Fidelity Q4 2025 retirement analysis, “the average 401(k) balance increased to $304,200 at the end of 2025, a 16% increase from the end of 2024” For workers with the same employer for 5 years. The 401(k) savings rate held steady at 14.2%. Gen X workers maintained their savings rate above 15% while 13+% Gen Z increased their savings rate.   “Gen Z workers are saving at a total rate of about 10.9% of income when employer matches are included, also based on the Fidelity survey, which is not far off from older generations.” 

  Post: Nothing Like a War To Bring Folks around to Personal Financial Planning

  Link to comment from April 12, 2026

• I think what was mentioned is most important. One of the challenges is managing lifestyle creep. Tracking spending can lead to budgeting and that is a means to that end. I'd add that it is important to avoid debt.

  Post: Nothing Like a War To Bring Folks around to Personal Financial Planning

  Link to comment from April 11, 2026

• I hear you. This reminds me of something that occurred with my in-laws. They were retired and lived on the east coast, near the ocean. G’s father was a birder and enjoyed walks in the woods. Her mother, not so much but she enjoyed the ocean views. Bill spoke periodically of seeing the Columbia River Gorge in Washington state, but it seemed it would never happen. Then G’s mother told us they were going to travel to LA. She had been invited to an event for playwrights. I decided this was an opportunity, discussed it with G and I roughed up a travel itinerary to get them to the Gorge. They would take a train from LA to San Francisco. We would fly in, pick them up in an SUV and travel by vehicle. We discussed as a group and they agreed. I then planned a daily itinerary with daily driving distances, stops along the way, places to stay and so on. We would travel north through California, stopping by the National Parks and Bodie ghost town. Then to the Columbia River and east toward The Dalles, OR for a short visit with a relative. We would return via the Oregon coast and the Pacific Coast Highway, stopping at lighthouses because Bill was a fan. I made all of the necessary reservations. As the time approached there were some serious fires in California, and the price of gasoline went above $5 a gallon. It was tempting to cancel the trip, but I approached it as a “once in a lifetime event”. I carefully researched the fire situation and decided to persevere. Bill's health was becoming tenuous, but they decided to go to LA as planned and so we did the entire trip, as planned. In fact, he amazingly climbed many of the circular stairs in the lighthouses. The trip was more than what was expected and everyone had a wonderful time. I took thousands of photos, sometimes irritating G. From these we created an amazing DVD, set to music. The pertinent thing is this. We didn’t know it, but this was Bill’s one opportunity. Not long after, Bill’s health further declined and he was diagnosed with Parkinson’s, moved into a care facility for the remainder of his life.

  Post: The Opportunity Cost of Waiting

  Link to comment from April 10, 2026

• I've used Quicken for decades and because I enter all bills and income into it I get very detailed reports. Things I like: Projected monthly balances of accounts; no concerns about overdrawing. A list of bills forthcoming, including biller name, amount and due date. Automated importing of credit card information; payees, amounts, etc. Automated importing of investment, retirement and bank account data. Estimated tax. We run almost everything through credit cards which give us cash back each month, and I simply print the credit card statements and review for errors or fraud, etc. Quicken imports each payee and I check for proper category (utility, grocery, dining, etc.). Other useful information includes tax loss harvesting available in my investment accounts, a "Lifetime Planner" which takes information about income, expenses, debt and assets and projects account balances (savings) for each year until the end of life. One of the things I want to know each year is spending and this is provided. Will I spend all of my retirement income? Will I spend my RMD withdrawal? Etc. If not, how much will probably remain unspent as of December 31? Quicken includes a tax center with a tax withholding estimator and a link to file taxes with TurboTax.

  Post: Tools/calculators for monthly retirement cash flow and tax estimation

  Link to comment from April 9, 2026

• I agree that recency bias is important. The “news” can be equally detrimental to our financial plans. I should restate that and say I think we should be very selective about our information sources. I prefer written ones, but AI “slop” is making it even more difficult to get a grasp on reality.  With all of the negativity, what’s the reality for my accounts? I’m using data as of 4/7/2026.  I would hope that HD readers are “long term” investors. By that I mean investing with the intention to hold for 10-15 years.  I do use a long-term approach and it has worked for me. Of course, there are short-term ups, and downs. For example, I own a TIPS fund and even with dividends the current value shows a “loss” of 2.96%. But that fund is only 1.92% of my portfolio ( I prefer to hold bonds). The real decline to the portfolio is 0.058%. That miniscule amount is hardly worth thinking about.  I think it is useful to define investment gyrations as declines or increases. After all, there is no loss incurred (or gain) until one sells and cashes out.  Anything purchased recently may show a short-term decline in value. If we think long-term, it is reasonable to assume there will be an increase in the future. Certain, more volatile stocks or investments may not behave with the overall stock market. That’s the nature of speculation.  My point is, even a 50/50 portfolio can do very well, long term. Mine has. However, I’m retired and so I am prudently more conservative and practice wealth defense. This would not be my approach if I were more than 10 years from retirement.   My portfolio currently shows an increase in value of 0.4% since 12/31/2025. It shows an increase of 10.25% since 12/31/2024. The increase would be greater if I didn’t take RMDs, and if I hadn’t withdrawn 10% in 2023. The S&P 500 shows a recent decline of about 2.6%.  Certain investments have been helpful to me. My Gold and Precious Metals fund shows a recent decline in value, although it is up about 130%. A utility I purchased in 2014 is up 400%. My energy ETF is up about 250%. There are 15 holdings which have more than doubled in value.  Even the S&P 500 shows a 5-year gain of 62%, excluding dividends.  If, after analyzing your portfolio you find it to be too volatile or subject to larger declines recently, let’s say greater than 10%, then perhaps you should re-evaluate your approach. However, if you are young, you may have decades of investing ahead  If the market perturbation is disturbing, take a look at your net worth. With recent real estate value increases many of us have seen an increase in our net worth, even if we fully depreciate automobiles, etc. In my case, because I have not spent all of my annual RMDs, the remainder goes into savings. That too has improved my net worth.  

  Post: Recency Bias (or: You’re Running Buggy Software)

  Link to comment from April 8, 2026

• Well, I’ll admit that parenting was costly. Costly in dollars and in time.  I didn’t marry until the age of 30 and I married because I wanted children. I couldn’t see any other reason for making that commitment and from a financial perspective I viewed cohabitation as the smarter choice, if children were not to be. I was fortunate and that marriage yielded two children. They occupied an incredible amount of my time and resources. As an involved parent my life expanded in many ways. For example, I learned to backpack and canoe in the wilderness because they wanted to do that. Then I became a youth group leader and coach. There were sports and band and orchestra. I learned to sail and taught them. Frankly, being a parent gave my life a focus and meaning that would not otherwise have occurred. Was it difficult? Yes, at times it was incredibly difficult. Juggling my career and business was difficult. Was having children financially costly? Yes, and college was very expensive. But today the children are completely independent, have incredible careers, are in committed relationships and I have a grandchild. I read that younger people want to live a life of experiences. That’s what having children was like for me. I do understand that marriage or a committed relationship, and having children isn’t for everyone. There are different vocations in life. 

  Post: Financial regrets about parenthood?

  Link to comment from April 5, 2026

• It would be interesting if there were a control group, comprised of a basket of Vanguard Index Funds.

  Post: Stock Market Contest

  Link to comment from April 5, 2026

• I think your plan is a good one. Perhaps the most difficult part is saving. It was for me. I began working and saving in high school. 50% of my net wages went into a savings account. The rest went to school related expenses. I continued saving until the age of 30. My employer also had a profit sharing plan, which was before the existence of IRAs, 401(k)s, etc. After marrying, a portion of my savings went into the down payment for a house and paying off my spouse’s college debt. Money was also set aside for college for the children. I was saving a significant amount, but most of it wasn’t going toward my retirement. That can be a problem.  At the age of 54 I was starting over. My savings were zero, but the children had all finished college. I state that here because I was able to resume saving, and I did eventually achieve a significant retirement account. But I did have to work longer than many. At the age of 67 I began a “phased” retirement, with a gradual reduction in hours worked each year. I worked part time for a number of years, continuing to contribute to my IRAs. I did finally, fully retire in my 70s. My point is, we can have plans and good intentions, but circumstances can intervene. Nevertheless, it is possible to plan and prepare for retirement, no matter what those circumstances are. 

  Post: Perfection, enemy of good

  Link to comment from April 5, 2026

• My preferred grocer has an online shopping app. When G and I do our weekly inventory or discuss a shopping list I open the app and add the items to the shopping cart. I can use this list when shopping at any grocery. It also provides the total cost of items in the cart. It's a convenient way of managing groceries and I think we purchase less.

  Post: Simplify Everything

  Link to comment from April 1, 2026

• I always treated the home or condo as a place to live, and as a cash trap. History has proved me correct. Having owned several RVs since 2013 I approached these similarly as expensive, depreciating 'assets'. I do see distinct advantages to owning a home, but controlling emotions and not overspending is my preferred approach. Housing entails 'hidden" costs, including maintenance and taxes which can be considerable. Being aware of the total cost of ownership is a helpful way of improving cash flow and reducing total costs.

  Post: It’s all so relative, where you live and what $$$ you may

  Link to comment from April 1, 2026