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WHEN A HUSBAND dies, his widow inherits his IRA. Somewhere in the paperwork of the months that follow there is a decision to make, and nobody presents it to her as one. She can take the account as her own, or she can leave it titled as inherited.
Taking it as her own means filling something in. Leaving it means doing nothing, and the IRS tells custodians they may assume that is what she wants.
My wife Suzie and I have been travelling around the Iberian peninsula for three weeks now, moving between hotels as we go. Last night, over a brandy nightcap, she asked whether the one in my hand was cheaper or pricier than the ones we’d had at our previous two stops. I had no idea. Worse, I couldn’t even tell her what this one cost.
That’s not like me. I’m normally frugal to a fault, so not knowing the price of a drink I’m actively holding is close to a personality violation.
This post is an extension of Rick’s and Richard’s recent posts regarding taxes in retirement.
A recurring issue I dealt with as a tax preparer was calculating a (unpleasant) surprise the first year that someone retired. While working, the employee typically gets a paycheck with adequate tax withholding. When he leaves the job behind for the greener pastures of retired life, things can get a little more complicated. Now, instead of a single W2 to deal with,
Per the TreasuryDirect website –
https://www.treasurydirect.gov/savings-bonds/idme-one-month/
ID.me will replace your TreasuryDirect traditional login and will be required after October 28, 2026.
As was noted today on the Boglehead’s Forum if you have holdings directly with the US Treasury and decide to and are able to sell all such holdings before the login change over you would still need to be able to login in 2027 to get your 2026 tax documents like 1099-Int., etc.
Complaining about taxes is not unique to seniors or in my case maybe a super senior, but they are mighty vocal and prolific on the internet. I was curious, how much could a age 65+ couple earn in retirement before actually paying federal income taxes on their money?
I ran a couple of scenarios using AI tools. I was a bit shocked at the results. Here is an example …
I asked what a couple both age 65 + with combined SS benefits of $50,000,
With all that’s going on with SS (COLA, taxation, potential cuts) and some changes certain in the next six years, is it time to rethink the income replacement percentage you shoot for in retirement?
I won’t give my theory again, one or more of the Clements family will be upset with me😅
However, self preservation, a hedge against longevity, hence inflation and peace of mind still tells me that a goal of replacing 60, 70 or 80% of pre retirement income is not sufficient.
EVERY ARTICLE ABOUT Roth conversions says the same thing: pay the tax from taxable money, not from the IRA.
That is good advice if you have taxable money.
Plenty of retirees do not. Their savings sit almost entirely in a traditional IRA, built from years of 401(k) contributions and a rollover at retirement, with little brokerage money and no cash reserve worth naming.
For them, “pay from outside money” is not advice. It is a condition they do not meet.
AFTER YEARS OF heady gains in the stock market, many investors are facing the same question: To manage risk, they’d like to cut back on one or more of their holdings. But because of the potentially costly tax bill that might result, they aren’t sure exactly how to do that.
How can you square this circle?
One easy option would be to donate appreciated assets to charity. But that would make sense only if it aligns with your charitable goals and,
I noticed a book excerpt in the Harvard Gazette yesterday (5 Aug 2026) that goes into some depth on a topic that is raised here on HD with some frequency, notably by R. D. Quinn, most recently with regard to the Social Security issue. The book in question is:
“Gerontocracy in America: How the Old Are Hoarding Power and Wealth ― and What to Do About It” by Samuel Moyn, J.D. ’01, and published by Farrar,
Along with changes to the application of the COLA there is discussion about changing the way and amount of income taxes applied to SS benefits.
It’s quite complex, but here is a link to some alternatives from the Committee for a Responsible Federal Budget. https://www.crfb.org/papers/new-approaches-social-security-benefit-taxation
Advice, please: My employer moved our 401(k) program from Vanguard to Empower. The offerings are skimpy: no target date retirement funds, no life strategy funds, no balanced or all-in-one funds. Instead we can choose from 15 funds, many of them with fees higher than index funds. When I ask Empower why it tolerates this weak menu, I get variations of, “Tolerate? I didn’t know we even allowed plans this narrow.” And when I invite the employer’s managers to broaden the selection,
WHEN IT COMES to financial decisions, many investors subscribe to an approach known as evidence-based investing. The idea, as the name suggests, is to base decisions, whenever possible, on data rather than on intuition or other informal methods.
This sounds logical. It isn’t perfect, though. Economic and financial indicators have weaknesses which are important to be aware of.
Consider, for example, the Cyclically-Adjusted Price-to-Earnings, or CAPE, ratio, developed by Robert Shiller, a Yale professor and Nobel laureate,
No doubt you have heard or read the posts and comments, perhaps by friends about the Social Security COLA.
It’s not accurate, not fair, not enough, doesn’t keep up with our actual spending, use the CPI-E and all the rest.
One thing it does for sure is add to the Trusts growing shortfall.
Some people really need that annual boost, if for nothing else to help offset growing Medicare premiums. But others, including many in the HD community,
I used AI as an editorial assistant to help organize and refine my thoughts; the underlying ideas and personal experiences remain my own.
Rebalancing sounds simple. Pick your target allocation and, whenever a holding drifts too far, trade back to target.
That’s how I thought about it as I started managing my risk portfolio. The problem was that I never stopped to ask what “too far” meant. I found myself reacting to routine market movements that had little effect on my long-term plan.
The door bell rang unexpectedly three times in three days. The first on Wednesday, was a couple high school kids trying to drum up some window washing jobs. They seemed like good kids, and after telling them I already had cleaners, I felt sort of bad sending them away empty handed. I hope they get some jobs in the neighborhood.
The second ring, on Thursday, was from a guy selling exterminator services. Pretty quickly he launched into his spiel,
