A Penny Saved is a Penny Earned

A Penny Saved is a Penny Earned

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 one of the few things in your control. I encourage…

Read More Read More

Softening the Edges of the Market

Softening the Edges of the Market

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 is the process of making investment decisions based on what…

Read More Read More

The Retirement Digest 005

The Retirement Digest 005

The Retirement Digest is a collection of articles from around the web that I think members of the RFG community might find helpful. ***** This simple phone scam is stealing thousands from older Americans (considerable.com) Older people who fell for the scam—also known as the Grandparents Scam, because the scammers often call pretending to be a grandchild, usually in some kind of legal trouble—are likely to send cash, and those who did sent a median of $9,000. ***** Investing for…

Read More Read More

Medicare Part B Premium Estimates through 2028

Medicare Part B Premium Estimates through 2028

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 the table: These premiums are just the lowest tier of…

Read More Read More

The Surprising Reality of Financial Decision Making As We Age

The Surprising Reality of Financial Decision Making As We Age

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 especially true with regard to personal finances. In fact, research…

Read More Read More

“The Retirement Digest” 004

“The Retirement Digest” 004

“The Retirement Digest” is a collection of articles from around the web that I think members of the RFG community might find helpful. Sure Things Are Rarely Sure Things (etf.com) Larry Swedroe’s first quarter review of “Sure Things” – how have the gurus done so far? At the start of 2019, I compiled a list of predictions that gurus had made for the upcoming year, along with some items I heard frequently from investors…” Can You Receive Social Security Spousal…

Read More Read More

Why Average Market Returns Mean Nothing

Why Average Market Returns Mean Nothing

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 5 out of the 93 years was it even within…

Read More Read More

An Easy to Understand Guide to Required Minimum Distributions

An Easy to Understand Guide to Required Minimum Distributions

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 withdrawal that must be taken from tax-deferred retirement accounts starting…

Read More Read More

Finding Your Investing Edge

Finding Your Investing Edge

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 is all set, so all that’s left is the best…

Read More Read More

“The Retirement Digest” 003

“The Retirement Digest” 003

“The Retirement Digest” is a collection of articles from around the web that I think members of the RFG community might find helpful. Exercise Makes Us Happier Than Money, Says Science (stylist.co.uk) “The results, published in the journal The Lancet, show that non-active people felt bad for an average of 18 days more than those who regularly worked out.  More compelling, however, was the fact that physically active participants felt just as good as those who didn’t work out, but earned…

Read More Read More