Search results for: 4% rule

IS IT WORTH OWNING international stocks? There’s far from universal agreement. The traditional argument for investing outside the U.S. is straightforward: diversification—since domestic and international stocks don’t move in lockstep, and sometimes diverge significantly.
At the same time, however, international stocks have lagged behind their U.S. counterparts for so many years that it’s been trying the patience of even the most tenacious investors. Domestic stocks have outpaced international stocks in eight of the past 10 years.

I read Adam Grossman’s article Riding the Rails with great interest. He gave a well balanced perspective on retirement income strategies, but I came away thinking it’s complicated and scary no matter which approach is used – the point is these strategies are beyond the ability of many people and perhaps more so as we age.
There must be a better, that is, simpler way although I admit I don’t know what it is. Does anyone want to live in retirement knowing that to sustain their income at some point they may have to cut back on spending,

A RECENTLY RELEASED book titled How to Retire is a goldmine for those in or near retirement. For the book, Christine Benz—Morningstar’s director of personal finance and retirement planning—conducted interviews with 20 experts, covering every aspect of retirement.
The result is a valuable field guide for those tackling life after work. Below are seven insights I found particularly useful.
1. Social connections. When we think about retirement planning, most of us tend to think first about the numbers.

It’s real, it’s global, it can’t be stopped and it can be good or bad.
It is inflation. 
I had someone tell me recently that U.S. annual inflation has been 10% for the last several years.  That is not true of course although it may feel like it to some people. 
My guaranteed income is a pension and Social Security. There is no COLA on my pension. Since I retired in 2010, the buying power on the great majority of my income has eroded by 43%. 

I’m reading frequently these days about Roth conversions and Required Minimum Distribution tax bombs.  Since I couldn’t know my own future tax rates and situation in advance, I have attempted throughout my working years to balance tax-deferred and tax-exempt.  I find myself close to retirement with the following breakdown:
45% tax-deferred (Traditional IRA, 401k, etc)
12% taxable (brokerage, savings, etc)
43% tax-exempt (Roth IRA, Roth 401k, HSA)
I haven’t done any kind of analysis to see if Roth conversions will be advantageous to me at some point,

So we’re thinking about buying a rental home, either in our college town or the town 10 miles north of us. I’ve written here before that we were briefly landlords in the late 90s when we moved to a larger home and rented out our starter home. But we felt we didn’t have the bandwidth to be landlords, so we sold the place after a year. That was a major financial mistake.
Why are we considering this now?

I am looking to get on to Medicare early next year and while reading up on this topic, I see this line, “All plans with the same letter have the same coverage, but prices can vary based on the insurance company” repeated often regarding the Medigap policies.
For example, when I look up Plan G for my state (SC), I see that there are “47 plans” and the premiums range from a low of $90 all the way up to (gulp) $493.

ANY BABY BOOMER WHO grew up around New York City is probably familiar with the name Robert Moses. He was the city planner who wielded enormous power over the development of New York from the 1920s to the 1960s.
Having grown up on Long Island, I saw his work firsthand in two main highways, the Long Island Expressway and the Northern State Parkway. They were designed to appear park-like, with arched bridges, wide grass run-offs and trees alongside the entire route.

DEATH AND TAXES are inevitable—and, as I keep getting reminded, also inextricably entwined.
I’m not so fortunate that I need worry about federal estate taxes. That privilege belongs to those who die with $13.61 million in 2024. But that doesn’t mean the taxman isn’t hovering over my demise, raising a host of lesser issues.
Paying the piper. Over the past few years, my focus has been on making big Roth conversions while staying within the 24% federal income-tax bracket.

Not a day goes by that I don’t read something like “Americans say they will need $1.8 million to retire or $1.46 million or $X million” to retire “comfortably.”  “Experts” say it’s a multiple of retirement expenses –  25X I think – as if those expenses are steady and predictable over a retirement lifetime. 
Of course, many headlines talk about $1,000,000 as well. 
I see posts on social media- “I have $800,000 saved, can I retire?” The answers in reply are entertaining because based on the limited info given –

A recent forum post explored the topic of how to financially protect a surviving spouse. Several commenters mentioned they either had, or were planning to, delay the higher earners Social Security (SS) retirement benefit until 70 to assure that the surviving spouse received the maximum benefit. This is the plan my wife and I are employing, delaying my benefit until I reach 70.
We are currently updating our estate documents, and during a discussion my wife asked me what would happen if I died before I turned on my SS benefit.

In 2024, it seemed like the stock market went in just one direction—up. That notion has been shattered in the past few weeks. The Nasdaq is well into correction territory. The Japanese stock market tumbled 12.4% on Monday alone. Legend has it that the great banker, John Pierpont Morgan, was once asked what was going to happen in the stock market. His answer: “It will fluctuate.”
Stock market volatility is nothing new. But investors have hardly mastered their nerves and emotions in the face of it.

A recent comment in the Forum got me thinking about the inherent value of certain fixed income instruments. The commenter said they did not include their traditional pension or Social Security retirement benefit in their balance sheet when calculating net worth. This makes sense since neither of these is easily convertible to cash.
But pensions and SS clearly have significant value, and in many cases are the largest asset a retiree owns. I think it’s useful to get a feel for these amounts.

I BEGAN INVESTING in the stock market in 2007. Within a year, I’d lost 60%. My response was like that of almost any human: I stopped investing.
That’s what happens to most people who start investing at the height of a bubble. They invest in something when everybody else does. And when everything comes crashing down, the pain of loss is so bad they swear they’ll never invest again. 
While I missed out on huge returns in the years that followed the financial crisis,

My family has been using HSAs as stealth Roth IRAs (with the added benefit of a tax deduction), in that after a couple of years in the beginning, we no longer make withdrawals for current medical expenses.
One neat trick we were able to pull off is that my son, while on our insurance before age 26, made the family contribution to his HSA (in addition to my wife’s family contribution and $1000 catch-up contributions for me &