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Fire the 4% Rule

Article by Greg Spears  |  Jan 25, 2022

I DID ACHIEVE financial independence and retire early—if you count age 64 as early. My friend Jose, a true believer in FIRE, or financial independence-retire early, celebrated his retirement at 44. That took a steely nerve that I lacked, plus I had big college bills to pay before retiring.
One big challenge of FIRE, of course, is that your savings might need to last 40 or even 50 years. Vanguard Group recently published a research paper to help FIRE followers go the distance.

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Seven Money Rules

Article by Adam M. Grossman  |  Jan 23, 2022

I DESCRIBED A SET of ideas last year that I called truisms of financial planning. They’re concepts I’ve found helpful in navigating the world of personal finance. Below are seven more.

1. Jeff Bezos is a bad role model. So are Bill Gates, Elon Musk and pretty much every other billionaire. Of course, they’re all great geniuses, so why would I say that? The problem is how they made their money. In each case,

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Rule Your World

Article by Adam M. Grossman  |  Aug 25, 2021

I’VE NEVER BEEN a fan of financial planning rules of thumb. To understand why, consider a common shortcut for choosing an asset allocation: The allocation to bonds in a portfolio, according to this rule of thumb, should equal an investor’s age.

For example, if an investor is 65 years old, his or her allocation to bonds should be 65%. That sounds reasonable—until you realize that Microsoft founder Bill Gates is 65. Should he have the same asset allocation as everyone else his age?

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13 Rental Car Rules

Article by Michael Flack  |  Aug 20, 2021

IN SEPTEMBER 2017, my wife and I sold our home, car and almost all our earthly possessions. We spent the next four years driving across four continents. Along the way, I learned a great deal about renting a car that, in this rental-car-challenged world, could make your travels less costly and more reliable.
1. I use Expedia, Kayak and Hotwire to compare rental car rates. When you book, pay attention to whether your reservation is free cancellation or pay now (noncancellable).

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Ignoring the Rules

Article by Joe Kesler  |  May 27, 2021

ONE HALLOWEEN, SOME of my teenage buddies and I were having a great time throwing water balloons at trick-or-treaters. It was a lot of fun—until we got caught. After getting hauled down to the police station for a lecture, and then receiving another one when I got home, I’ve been pretty much on the straight and narrow ever since, including when it comes to money.
Over the years, I’ve discovered various tried-and-true rules of investing and those have been the keys to my success.

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Breaking the Rules

Article by Jonathan Clements  |  Jun 27, 2020

YOU KNOW THOSE timeless financial principles? Sometimes they don’t age so well.
Since I started writing about money in 1985, all kinds of financial principles have gone out the window—and that’s continued right up until 2020. Indeed, if you’re still hewing to the financial wisdom of the 1980s, you’re likely hurting yourself today. Here are four examples:
1. Goodbye, Peter. In the late 1980s, America’s most celebrated fund manager was Fidelity Magellan’s Peter Lynch.

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Working the Rules

Article by Peter Mallouk  |  May 7, 2020

IT’S YEARS LIKE THIS that can greatly improve our chances of a comfortable retirement—if we play our cards right. Indeed, thanks to recent rule changes enacted in Washington, there’s a slew of ways to bolster our finances.
What steps should you be taking? Here are seven things to do—and not do—with your retirement accounts right now:
1. Don’t take your RMD. As part of this year’s CARES Act relief package, individuals don’t have to take required minimum distributions (RMDs) from their IRAs or employer-sponsored retirement plans.

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Enforcing the Rule

Article by Jiab Wasserman  |  Apr 7, 2020

THE MOST POPULAR retirement income strategy is built around the so-called 4% rule. Three-quarters of financial advisors say they use some variation on this approach. But is it safe?
The 4% rule specifies that you withdraw 4% of your nest egg’s value in the first year of retirement. Thereafter, you increase the dollar amount withdrawn each year at the inflation rate. Based on historical U.S. stock and bond returns, that strategy should carry you safely through a 30-year retirement.

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Rule the Roost

Article by Jonathan Clements  |  Feb 15, 2020

I AM AGE 57 AND I’M planning to move, so you might imagine I’d be interested in the best states to retire. On that score, there’s plenty of advice available.
Bankrate says the best option for retirees is Nebraska, followed by Iowa, Missouri, South Dakota and Florida. Meanwhile, WalletHub gives the nod to Florida, with Colorado, New Hampshire, Utah and Wyoming rounding out the top five. Want a third opinion? Blacktower Financial Management puts Iowa at No.

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Rewriting the Rules

Article by Adam M. Grossman  |  Jun 1, 2019

WHEN POLITICAL parties set aside partisan bickering and agree on an issue, it’s worth taking note. Such was the case last week when the House of Representatives voted 417–3 in favor of a bill known as the SECURE Act. This legislation would represent the most significant set of changes to retirement rules in more than a decade.
Why the sudden bipartisan cooperation? For better or worse, both parties recognize that a growing number of Americans face a retirement crisis.

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House Rules

Article by Jonathan Clements  |  Feb 2, 2019

FOLKS USED TO SAY, “You can’t go wrong with real estate.” They sure don’t say that anymore. It’s been a rollercoaster dozen years for home prices—and some experts think another rough patch is in the offing.
Since mid-2006, the S&P CoreLogic Case-Shiller U.S. National Home Price Index first tumbled 27.4% and then bounced back 53.6%, for a cumulative 12-plus year gain of 11.5%, equal to 0.9% a year. Could we be facing another dip?

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Twelve Rules

Article by Phil Dawson  |  Sep 19, 2018

JORDAN PETERSON, a Canadian clinical psychologist and professor at the University of Toronto, has thundered onto the cultural scene, thanks in large part to his book 12 Rules for Life: An Antidote to Chaos. I began reading with healthy skepticism, but quickly became a fan.
Not that the doctor and I agree on all points. But the book immediately confronted my intellectual laziness in a careful but unavoidable way.

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31 Rules of the Road

Money Guide

LOOKING TO IMPROVE your money management? Here are 31 rules for the financial road ahead:
1.  Check your retirement progress by taking your nest egg and applying a 4% annual portfolio withdrawal rate, equal to $4,000 a year for every $100,000 saved. Will you have enough retirement income—or should you be saving more?
2. Don’t automatically claim Social Security at age 62. It often makes sense to delay benefits so you get a larger monthly check,

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Wash-Sale Rule

Money Guide

IF YOU OWN A STOCK in a taxable account that falls in value, you can take some of the sting out of that loss by selling your shares, realizing a capital loss and then using that loss to reduce your annual tax bill. A good idea? Problem is, selling means giving up any chance of making back the loss.
Many folks aren’t keen to do that, so they often look to buy back the shares.

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Roth’s Five-Year Rule

Money Guide

IF YOU MAKE REGULAR annual contributions to a Roth IRA, you can withdraw those contributions at any time with no taxes or penalties owed. It’s a different story, however, with the account’s investment gains.
Those gains will be subject to both income taxes and tax penalties if you withdraw them within the first five years and if you are under age 59½ (or, to put it another way, you need to wait five years and until after age 59½ for the account’s growth to be totally tax-free).

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