FOR ME AND MANY other older baby boomers, the traditional retirement model doesn’t work. We’re healthier and living longer than prior generations. Most of us don’t want to sit in a rocking chair, gaze at the sunset, play golf continuously, eat boring lunches at the senior center or live like we’re on vacation every single day.
Instead, we want to remain relevant, with meaning and purpose in our lives, and we want to continue to learn and grow.
STICKER SHOCK is common when families begin the college search—with good reason. According to the U.S. Department of Education’s National Center for Education Statistics (NCES), inflation-adjusted college costs have more than doubled over the past 30 years.
Annual tuition, fees, room and board for fulltime undergraduate students at four-year colleges averaged $26,100 in 2015-16, the last year for which NCES data is available. That average drops to $22,400—if you include junior colleges. On the other hand,
I’M LOOKING AT MY credit card statement and I have a month-end balance of $3,475. My other credit card has almost $1,200 owed on it. My property taxes, automobile insurance and home insurance are due. I have an appointment in a few days to see my lawyer about my trust. He charges $450 an hour. Rachel and I are going on two weekend getaways in the next two weeks.
But I’m not rattled about all these expenses.
FOLKS OFTEN FEEL that, because they’re a certain age, their time has passed and it’s too late for them to pursue new goals, whether it’s saving for retirement or starting their dream business. But I believe we can reinvent ourselves at any age.
Last year, I listened to an NPR podcast that featured an interview with Bob Moore, founder of Bob’s Red Mill. You’re probably familiar with Bob’s Red Mill: Their products are now sold in most grocery store health-food sections.
IN JANUARY 1946, a man named Stanislaw Ulam found himself confined to a hospital bed, having suffered an encephalitis attack. A brilliant scientist and a veteran of the Manhattan Project, Ulam wasn’t the type to sit idly while he recuperated. Instead, after playing innumerable games of solitaire to pass the time, Ulam began to examine the statistical aspects of the game.
Among the questions he asked: How can you accurately estimate the probability of winning a game?
WHAT DOES A GOOD financial life look like? Here’s a quixotic roadmap—comprised of 45 steps:
Stuff part of your babysitting or lawn mowing money in a Roth IRA. Suggest to your parents that they should encourage this sort of behavior—by subsidizing your contributions.
Get a credit card when you head off to college, charge $5 every month and always pay off the balance in full and on time. You’ll soon have an impressive credit score.
TO BORROW FROM the movie Casablanca, we are all “shocked, shocked” at the college admissions scandal recently uncovered by the FBI. We are seemingly united in condemning the extremes that these wealthy—and sometimes famous—parents went to, as they sought college admission for their children. We’re talking fraudulent inclusion on sports teams, submitting fake standardized test scores and outright bribery.
But the idea of parents gaming the system for their child’s benefit is nothing new to those of us in high school education.
MANY OF US HAVE little more than a weak, reused password standing between our financial assets and a remote attacker—one armed with powerful tools and a database of passwords from security breaches. This is a losing battle. It’s the most likely way for weak computer security to put our finances at risk.
Think this can’t happen to you? I’ll bet you have at least one password taken in a big security breach. A quick way to find out is entering your email address at Troy Hunt’s HaveIBeenPwned site.
A WAR IS RAGING. On one side of this conflict is the individual and, on the other, society and culture. To the victor goes your attention and your money.
I submit you’ll win through intentionality—and you’ll lose if you let society determine what’s of greatest value to you. I was on the losing side for many years.
As an undergraduate, I thought I wanted to be a lawyer. Why? Not because I had a deep passion for the law.
EVERY YEAR, the NCAA basketball season concludes with the March Madness playoffs. Many Americans engage in bracketology—trying to figure out which teams will get knocked out in each round and which will advance. Warren Buffett even offers an annual bracket-picking challenge, where Berkshire employees can win $1 million a year for life.
This year, however, Americans with substantial retirement accounts might also want to try another form of bracketology: studying the 2017 tax law—and asking whether it offers a unique opportunity to convert hefty amounts of traditional IRA money to a Roth IRA.
AS I DRIVE AROUND town these days, I notice a lot of cars with temporary license plates—an indication they were recently purchased. What’s the reason? When I turn on the TV, I see a commercial for a local car dealership that’s offering to accept your tax refund as the down payment on a new car. Now it starts to make sense.
The dealership knows consumers are about to receive an influx of cash.
IN MY ROLE AS a financial planner, I hear a lot of stories. By far the most appalling and upsetting relate to life insurance. All too often, insurance salespeople leave clients with policies that are simultaneously overpriced, inadequate and inappropriate.
Are you evaluating a policy? Here’s a quick summary of the most important considerations:
What type of coverage should I have? Life insurance comes in two primary flavors: term and permanent. Term insurance,
AS I’VE BUILT out HumbleDollar over the past few years, I’ve come to view the site not merely as a place where folks can learn about financial issues, but as a community that thinks about money in a unique way.
This shows up repeatedly in articles from guest contributors, with their focus on topics like spending thoughtfully, helping family, behavioral finance, indexing and achieving financial freedom. It’s a community where folks are trying to be rational about money,
THERE’S AN ABUNDANCE of advice on how to plan for retirement. Oh, it’s good advice. But it’s also a bit complicated, often requires discipline and always necessitates actually doing something.
And let’s face it: Who needs advice? Who wants to actually do something? Here are 20 ways to ignore the experts—and wreck your chances of a financially comfortable retirement:
1. Keep thinking retirement is so far in the future that there’s no need to act now.
WHEN I TAUGHT economics, I would present students with the financial misunderstandings that people often have—and which the study of economics can help them avoid. Examples? Here are five widespread misconceptions:
Mistake No. 1: The rarer something is, the more valuable it is. Economics really doesn’t care about rare things—meaning those things that are few in number. Instead, economics deals with scarce things, which are things for which there’s greater demand than current ways to fulfill that demand.