Retirement Field Guide

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The Retirement Field Guide

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A Penny Saved is a Penny Earned

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As investing has moved more from a narrative-based out-performance story to a commodity needed for effective financial planning, we’ve gotten to observe fund fees coming down across the industry. This is a great thing! The following table, from Morningstar’s annual fee study, I find to be particularly exciting. Every penny that you save on fees is another cent compounding toward your future. And as I state regularly, fund fees are… Read More

Softening the Edges of the Market

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As I was sitting in traffic on my way to the office this morning, I thought of the opening scene of the movie Office Space. If you haven’t seen it, take one minute and watch the video, it’s so relatable!  As I was watching the drivers around me weave from lane to lane, there appeared to be a very clear connection to “chasing performance” from an investment perspective.  Chasing performance… Read More

Medicare Part B Premium Estimates through 2028

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The Medicare Trustees Report for 2019 was just released and the following table shows Medicare Part B premium estimates through 2028. You can see in the table below (page 189 of the report) that the current Medicare Part B monthly premium for 2019 is $135.50 per person and they anticipate this to increase to $226.50 per person by 2028. This is an estimated increase of almost 6% per year. See… Read More

The Surprising Reality of Financial Decision Making As We Age

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One of the biggest, and yet, least discussed risks associated with retirement is the issue of cognitive decline as we age - particularly how it impacts your financial decision making. Nobody likes to think about getting older. Even less so, nobody likes to think about the decline of their mental health. But the harsh truth is that as we get older, our cognitive abilities decline at some point. This is… Read More

Why Average Market Returns Mean Nothing

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David Hultstrom of Financial Architects puts out a great quarterly newsletter for financial advisors (and a great one for investors as well). In the most recent version of his advisor newsletter, he posted the following chart below with some great commentary that I wanted to share with you. The average compound return (i.e. geometric) is 9.75% (red line). Only in 1992 did an annual return round to 10%. In only… Read More

An Easy to Understand Guide to Required Minimum Distributions

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Despite the fact that Required Minimum Distributions (RMDs) impact everyone above age 70.5 with a tax-deferred investment account balance, there is still a surprising amount of confusion around the subject of RMDs and how to calculate the distribution required. Before I get to the actual calculation, I’ll briefly address some frequently asked questions about RMDs many retirees may be curious about. What is an RMD? This is the mandatory minimum… Read More

Finding Your Investing Edge

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I’m going to continue my poker theme. Last week, I drew a comparison between poker and your odds of success as an individual versus the best in the world. This time, we’ll discuss how fund managers compete against each other and where you might have an advantage over these fund managers. Let’s say you had the opportunity to walk the floor at the World Series of Poker. The final table… Read More

What are your odds?

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Imagine your friend invites you out to play a friendly game of poker. You agree to go, because why not, right? Should be fun! Once you sit down at the table that evening, you find out that the players you’ve just sat down with are the best poker players in the world. They are the stars from the World Series of Poker - each of them accumulating millions of dollars… Read More

Why I Choose to Focus on Helping Retirees

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Given that I focus exclusively on retirement planning for individuals, I am often asked the simple question, “Why?”. There are three primary reasons: (1) It’s needed. The American College conducted a retirement literacy quiz with over 1,200 Americans age 60-75 with at least $100,000 in household assets (not including their primary residence) and the results were putrid. • Retirement literacy remains low – 74% failed the 38-question retirement literacy quiz!•… Read More

Giving Money to Your Children - An Alternative Strategy

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There are two times people can give money to their children - at death and during life. Thank you Captain Obvious. But more and more, I hear people saying that they’d like to give the money now rather than at death so they can experience the enjoyment of giving and seeing what a difference it can make in the lives of their children. I’d like to challenge that strategy today…. Read More