SOME YEARS AGO, the scientist Edward Fredkin identified a quirk of human behavior.
When it comes to making decisions, Fredkin found, we tend to allocate our time inefficiently. Suppose, for example, you’re at the grocery store, looking for something basic like paper towels. In a big supermarket, there might be a dozen or more choices. The result: Because there are so many options, it can be hard to choose among them. In the absence of big differences,

WHEN MOST PEOPLE think of Roth IRAs or Roth 401(k)s, they just think “tax-free withdrawals.” But that’s only part of the story.
Roth accounts can protect you from financial traps that catch many retirees off guard. Here are five key advantages to keep in mind:
 
1. Tax Rate Protection
One thing we can’t control is future tax rates.
Did you know that in the 1980s, the highest federal tax rate was 50%?

IMAGINE YOU ARE already doing all things possible to minimize your taxes:

You are maxing out your pre-tax 401k
You do tax loss harvesting
You did tax efficient placement
You are maximizing Roth IRA through Backdoor Roth

But what other strategies can you use to minimize taxes? You also might not want to start a business or buy real estate.
Another option that many people aren’t aware of is the cash balance plan (CBP).

THE IRS JUST released a new form called Schedule 1-A, which includes all the new tax bill deductions.
I wanted to quickly go through some of it, so that you are more aware of the new potential savings opportunities.
I’ve previously discussed some portions of the bill, but this is the first time we have a peek of the new lines.
All of these deductions are in addition to the standard deduction or itemized deduction.

WHEN IT COMES to financial decisions, there are, as I’ve argued before, two answers to every question: what the calculator says, and how you feel about it. There’s a fly in the ointment, though: Calculator answers might appear to be based in logic, but they’re still imperfect.
Why?
Ian Wilson, a former executive at General Electric, explained it this way: “No amount of sophistication is going to allay the fact that all knowledge is about the past,

Warning: this post is more of a rant and a plea for sympathy than it is thoughtful or informative!
So as you know, I retired on July 1. Or did I? I retired from two university systems and was supposed to get one pension check from each starting August 1. On August 1, I got…nothing. And it was my birthday, too!
I already knew I wouldn’t be getting one of the checks that day; my retirement application had been in limbo for a while (not my fault) and is allegedly being processed.

In an earlier article, I described my unexpected decision to use fixed-term immediate annuities (FTIA) to form a floor for my expenses over the next ten years. I thought you might find it of interest if I expand on this, relating to the balance of our income needs and how this might play out over the longer term. To be clear and upfront this strategy is “Prioritizing Income Generation Over Capital Preservation” but not in a reckless way and could change over each 10 year block.

Well, I tried to stay up until midnight to pop a cork, but it just wasn’t happening. So today I woke up as a retired person!  If you’ve read my articles from 2024 on the topic, you know this didn’t sneak up on me.
My road through the logistics of retiring from two university systems and applying for Medicare went…somewhat smoothly. I was pretty meticulous in my preparation. I attended webinars for both systems last year and put the application dates on my calendar.

Retirement sounded so great to me a few years ago. Now as I face the reality of it, I find myself having panic attacks. “No more income? I will end up a homeless bag lady on Main Street….” I find myself thinking.
All irrational thoughts since I will have a COLA pension supplemented by my savings and will receive social security in 18 months.  These revenues will come close to matching my current net pay when I start social security.

Well, mostly FI, but some RE. (FIRE standing for Financial Independence, Retire Early). Christine Benz from Morningstar recently attended a CampFI event in Spain, and wrote about her experience here.
She comments that “A lot of people have a caricatured perception of the FI community. They assume that everyone is trying to live on $10 a day in order to hang it up at age 35.” While she met some young people, she met older people as well.

Dear HD readers:  We had so much fun with the original version of this post, that I thought it might be fun to add a 3rd possible route to funding retirement at $138,000/yr.   Of course, there is no reality in this, no real personal info, it is just a scenario.  And, most important, any legal route that get you to your desired retirement income is the right one for you.
 
One of my friends is hitting 73 in August and we were discussing his need to do an RMD this year. 

I’m 58 and my wife is 56. We’ve been planning our retirement with care and intention for years—no debt, solid retirement savings, a well-diversified portfolio, and a liability-matching plan (LMP) that covers us until Medicare kicks in. We’ve talked through our priorities, run the numbers, and built our plan together. The core approach to our plan was heavily influenced by Bill Bernstein and Wade Pfau’s writing and we are content with a good funded ratio.
One thing we agreed on early: when one of us loses or leaves work,

I always thought the glowing stories of FIRE folks were a bit dodgy. Much of the time they aren’t even retired in the traditional sense. Sometimes they go too far sharing their acquired wisdom for cash.
I followed one blogger for several years. She shared her frugal ways, extreme in my view like buying her two-year olds shoes in a second hand thrift shop. She wrote a book, gained a lot of publicity, was featured in news articles and gave advice. 

Based on the feedback I have received on HD over the years mostly directed at my failure to budget or track expenses in detail using spreadsheets, my selection of some high expense investments and to not pay much attention at all to our investments, failure to use financial or retirement planning services, retaining life insurance in retirement, beginning Social Security at FRA while working, buying cars for cash, retiring at age 67(part of my income replacement strategy),

I have expressed my opinion on the need for and desirability of a steady income stream in retirement, as guaranteed as possible. Next Friday my pension will be deposited in our bank account. On the second and forth Wednesday each month our Social Security will be deposited. All that has happened each month for the last seventeen years.
I don’t worry about withdrawal strategies, withdrawal percentages, guard rails, tip ladders or any similar strategy. The IRC tells me what I must withdraw from my IRA.