Jonathan Clements's Blog, page 101

Going Solo

ON OUR RECENT TRIP to Alaska, I was surprised by the number of solo women passengers. It turns out I shouldn’t have been.

According to a recent report from Road Scholar, a not-for-profit travel company geared toward those age 50 and older, a quarter of its travelers were single, with 85% of them women. That group included married folks traveling solo. It’s a growing trend. The Road Scholar study reported that 60% of the company's solo travelers in 2022 were married.

Why would a married person want to travel solo? Among the women surveyed by Road Scholar, there were two major reasons: Either their spouse wasn’t interested in travel, or the spouses had different travel interests. We know couples where one of the spouses is eager to travel, while the other is a confirmed homebody. The third most-cited reason for traveling solo: Health issues limited travel for one partner.

The solo travelers I’ve spoken to like having an experienced company make all the arrangements and provide local support if things go awry. That preference, however, can limit travel options and may mean paying a premium. Many of these planned trips, especially cruises, seem to be based on double occupancy. I looked at prices for the same Road Scholar trip to Alaska’s Inside Passage that my wife and I took in September 2023. There are 10 trips scheduled for 2024. All 10 had double cabins available, but only four offered single cabins.

The per-person price for a double cabin for a late August 2024 trip was quoted at $10,499. A single traveler booking the same cabin would pay $13,499. Road Scholar will try to connect a solo traveler with a cabin partner, but there are no guarantees. The company says it’s designing more trips with solo travelers in mind.

Interested in traveling alone? There’s an enormous amount of information available. An article in Travel & Leisure lists the 14 best tour companies for seniors. Several were highlighted for their attention to the needs of solo travelers. Road Scholar has a page listing “singles at no extra cost” trips, while EF Go Ahead Tours has a special page for solo tours, as does Overseas Adventure Travel.

Here are some ways to trim costs if you’re traveling solo.

Find a friend. Or a sibling, cousin or acquaintance. Two or more can usually travel more cheaply than one, because you can share costs like rental cars and hotel rooms.
Do it yourself. Planning your own travel is often the frugal way to go. Travel companies like the ones mentioned above can provide great service, but that comes at a cost.
Ask for a roommate. Many travel companies will try to match you up with another solo traveler, so you can share costs.
Accept the additional expense as the price of comfort and privacy. Many retirees have spent a lifetime working and saving. Perhaps it’s time to enjoy a little of that hard-earned wealth.

My wife has done trips with her girlfriends for many years. These have included “girls’ weekends” at the Jersey shore, Las Vegas, Boston, and several houseboat trips in central Pennsylvania and Arkansas. For some reason, I’ve never done a guys’ trip, although I’m thinking about it. Maybe it’s because of the extensive travel I did during my career. Some years, I was on the road for at least part of 40 weeks. Some of the travel was with colleagues, but much of it was on my own. I didn’t mind the travel too much, but I was always glad to get home.

I’ve been happily married for almost 42 years, plus Vicky and I dated for five years prior to marrying. After all that time, the thought of single life is daunting. Maybe traveling solo, while we still have our spouses and partners around, is good training for our eventual singlehood. In a HumbleDollar article last year, Laura Kelly wrote about how she and her husband are taking steps to develop and maintain their independence. To that end, they’re planning some independent trips in 2024.

Richard Connor is a semi-retired aerospace engineer with a keen interest in finance. He enjoys a wide variety of other interests, including chasing grandkids, space, sports, travel, winemaking and reading. Follow Rick on Twitter @RConnor609 and check out his earlier articles.

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Things I’ve Picked Up

IT'S BEEN MORE THAN 10 years since my retirement journey began at age 52. For almost 30 years, I’d worked hard, especially the last two decades, when my twin brother and I owned a landscaping company. Vacations were few and far between, and even on vacation I was always on call.

I was burned out and ready for a new chapter. Going into retirement, I was well-prepared financially. But how I’d fill my days was something of a mystery.

Why wasn’t I worried about money? I’m frugal—a family trait—and had saved diligently in anticipation of an early retirement. I’d paid off my mortgage early and had no other debt. The house that my husband and I live in is only 750 square feet, making for reasonable utility bills and maintenance costs.

As I approached retirement, I’d calculated that, along with my husband’s government pension, we’d be able to live off the income and capital gains distributions from my Vanguard Group and T. Rowe Price mutual funds, and I wouldn’t have to sell fund shares.

Yes, 2022’s nerve-racking drop in the stock and bond markets had a significant impact on my portfolio. But having lived through several downturns during my 35 years of investing, I knew the best approach was to stay the course. Besides, there wasn’t much I could do. Going to all cash—with the resulting tax implications—was hardly an appetizing option. Indeed, I pay more attention to our taxable income nowadays, working to ensure we minimize taxes and stay below the Medicare premium surcharge income thresholds.

Spending time. While I was set financially, there was still the issue of what I’d do with my time. During my working years, I didn’t have many interests or hobbies. Like many retirees, figuring out what to do with my days was a matter of trial, error and frequent change.

I’d taken up cycling in a serious way a few years prior to retirement. Once retired, I spent many hours on the bike, cycling 8,000 to 10,000 miles each year. I enjoyed the physical challenge of 100-mile rides, and in 2017 put my body to the test, riding 35 centuries. But that was also the last year I rode a century, and since then my riding has slowly been replaced by hiking and walking, far safer activities with less risk from bike crashes and aggressive drivers, and not as taxing on the body. On these walks and hikes, I’d bring along my camera, and I began to enjoy the challenges of bird photography. I met some great photographers along the way, and learned much from them.

Early in retirement, I volunteered at a local immigrant advocacy organization, which I found somewhat rewarding but not enough for me to continue with it for much more than a year. In 2015, I was asked if I’d become chairman of the community’s beautification committee, something to which I was well-suited, given my background in landscaping.

Beautifying the community was gratifying, and I was able to meet a good number of my neighbors, who volunteered for the various beautification activities. This kept me engaged with others, something that’s important in retirement. But after a few years as chairman, I was ready for a change. I’d accomplished what I set out to do and I was ready for new challenges.

Talking trash. Litter within my county and state has always bothered me. Whether driving the highways or cycling the country roads, I was struck by just how much roadside trash there was. I began picking up litter within my community, and recruited volunteers for weekly litter patrols.

Trash would blow into the neighborhood from the main roads. On garbage day, trash wouldn’t always end up in the garbage truck. There was never a shortage of litter to be picked up. Soon, my efforts expanded to the nearby business district, where I worked with county inspectors to have businesses comply with various ordinances that require them to keep their lots clean.

During the pandemic, I’d hike the woodlands that are part of the local water company’s watershed. It’s a beautiful area where I could get out into nature and not see anyone for hours. Unfortunately, not everyone respects the area’s beauty. On my hikes, I was alarmed at the amount of trash I saw along the shoreline of the reservoir and thrown into the vegetation along the hiking trails.

With help from my husband, we began to clean up the area, taking out dozens of bags of trash, mostly beer bottles and cans, but also fish bait containers, fishing line and more. Now, we can go to the area and do some maintenance litter pickup, enjoying the beauty of the watershed without the distraction of mounds of trash.

My cleanup efforts have continued into two other watersheds. I’m now the “litter hot spot coordinator” for one of these watersheds and hope to soon be a board member of the other. My involvement with these organizations keeps me engaged, and allows me to meet more and more people, young and old, from different walks of life.

This community involvement reinforces what I’ve long known—that where I’ve lived for most of my life is where I also want to stay in retirement. My husband and I have thought about moving to his home state of Texas to be close to his family. But increasingly, we realize that we’re happy in our Maryland home, and that getting to Texas to see his family, or to Florida or Philadelphia to see mine, is just a short plane or train trip away.

The cost of living in Maryland is high and the traffic is bad, but we have access to excellent health care, and there are parks and a beautiful public garden close by. When we balance out the pros and cons, Maryland still wins. Traveling to other continents doesn’t hold much appeal for us, but we do enjoy our trips to family and friends in the U.S. I also travel often to Mexico, where I have numerous friends, many of them my former employees. We then travel together to different parts of Mexico.

Working life seems like a distant memory. My many hobbies and activities, and the connections I’ve made within the community, have been important. But I don’t expect things to stay the same.

There are limits to what you can do physically as you age, and I’ve adjusted accordingly. My husband encourages me to slow down, and I’m trying. I want to stay physically active for as long as possible, and taking care of myself is a must. As I’ve gone through retirement, I find it’s important to keep exploring, to find new opportunities that excite me—and not to let retirement become routine.

Nicholas Clements is retired and lives just outside Washington, DC. His younger brother is HumbleDollar's editor. Check out Nick’s earlier articles .

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My Father’s Daughter

MY LATE FATHER SPENT his entire career, from the time he dropped out of college to marry my mother until the day he died at age 61, in the insurance business. My father was also a huge fan of the San Francisco 49ers, our hometown NFL team.

Last year, the 49ers cruised through the playoffs, led by the team’s dynamic young quarterback, Brock Purdy. But then, in the NFC Championship game against the Philadelphia Eagles, Purdy was injured early in the game. The backup quarterback then went down with a concussion. The 49ers had to play more than half the game without a functioning quarterback. The Eagles won easily and advanced to the Super Bowl.

The NFC Championship debacle prompted the 49ers to sign an experienced young quarterback named Sam Darnold to be Purdy’s backup. As it happens, Purdy stayed healthy this season and Darnold has hardly played at all. Still, my father would have approved: Darnold is the insurance that helps 49ers’ management—and the team’s fans—sleep better at night.

As an insurance man’s daughter, I got the message early and often that life is full of uncertainties and even danger, and that there’s no such thing as too much insurance. But as I’ve gone through life and started questioning various beliefs, especially about personal finance, I wonder if I’ve occasionally overdone things.

Insurance we have now. We currently have insurance for life, health, dental, vision, our cars, our home, umbrella-liability and long-term care.

Insurance we’ve dropped or soon will. My husband and I purchased our term-life policies from my dad when our kids were born. We wanted to not only protect them, but also provide for each other. We’re both counting on the other’s pension, which will have 100% survivor benefits. Our term policies end in 2025 and 2029, and we have no plans to renew them. Our kids are grown and, by then, we’ll be drawing our pensions.

Until recently, we also had disability coverage to protect our income. I dropped mine within the past year when I realized that I could get up to a year of paid medical leave if I needed it. On top of that, if I got really sick or was permanently disabled, I’d just retire, since I’m so close to the finish line anyway.

I should mention that I was happy to have disability coverage when I had to go on bedrest during my second pregnancy. My husband was finishing law school at the time and I was supporting the family, so the complete loss of my income would have been catastrophic.

Learning to appreciate insurance. Despite wondering sometimes if we’re over-insured, several recent family events have made me appreciate the value of insurance. Our 20-something daughter has been in two separate car accidents in the past 18 months. Both times she was a passenger and both times she was seriously injured, requiring an ambulance ride and emergency surgery.

As it happened, the driver at fault in her first accident was well insured, and his insurance company offered her a generous and fair settlement. Not so with the second driver—he has the minimum coverage required by state law, and that won’t come close to compensating my daughter for her lost wages, let alone for things like physical therapy or counseling for post-traumatic stress.

Fortunately, we carry underinsured motorist coverage on our own family policy, and she may be able to get additional funds that way. She was also informed by the district attorney prosecuting the driver that there’s a state-run crime victims compensation fund that she can apply to. This has been quite a learning curve.

The other family situation involves my mother-in-law, now age 83, and her long-term-care (LTC) insurance. She and her husband purchased the LTC policy some 20 years ago. Now, she’s in the advanced stages of Alzheimer’s and needs to activate the policy for in-home caregivers. Her husband is also over 80, and has a hard time managing things like LTC insurance portals and claim forms. We’ve been helping him from 400 miles away, including several conference calls to the LTC insurance provider. Again, we’ve had to learn a lot quickly.

Getting acquainted with my mother-in-law’s LTC policy and procedures has made me think about our own coverage. Do we need LTC insurance? Ironically, thinking this through has made me realize that while my in-laws perhaps didn’t need it, my husband and I probably do. My in-laws are very well off and could pay as they go for care. At $1,000 a month, their LTC premium is expensive. Even though they’ll be using it now, the coverage may not have been worth it. By contrast, because we bought our LTC policies when we were in our 40s, they aren’t as expensive, plus we don’t have the resources that my in-laws do to self-insure.

We carry maximum liability coverage on our auto insurance, plus a substantial umbrella policy. My dad was the first to advise us to get umbrella insurance: “If you lose a lawsuit, you could be working for someone for the rest of your life.”

My husband’s torts professor in law school also urged his students to obtain coverage: “You’ll be earning money once you’re practicing lawyers, so you could be targets in a lawsuit.” Seeing how our daughter’s life has been upended twice by other drivers has reminded us that good liability coverage is both prudent for us and responsible toward others.

Insurance on the go. Our most recent insurance acquisition is an annual travel policy. I bought it earlier this year after reading an article on The Points Guy website. I had vaguely assumed that we didn’t need it because a combination of our own health insurance plus travel protections offered by credit cards would take care of any emergencies.

It turned out I was underthinking this. The medical insurance we had didn’t offer coverage while traveling abroad, so we changed policies during open enrollment at the end of 2022. As for the credit card coverage, that can be cumbersome to use, and there are lots of ways to do it wrong. Maybe most important, our travel policy gives a generous allowance for emergency transportation, whether being airlifted to a hospital or taking an unexpected flight home.

This travel policy is not the same as one you might buy when booking a pricey cruise or land tour. Those are primarily to cover your investment in the trip itself. The annual policy we bought does provide some modest benefits for things like trip delays or lost luggage, but the primary benefits are for medical emergencies. The policy I bought from Allianz costs $560 for my husband and me, and it covers every trip, domestic or abroad, during the year. It also has a generous allowance if a rental car is damaged or stolen.

I hope we’ll never need to cash in on many of our insurance policies, but I’ve learned to expect the unexpected. While insurance doesn’t solve every problem, it can remove a major stressor in a difficult situation. I shudder to think what could have happened if our daughter didn’t have access to medical coverage and to auto insurance when she was a victim of those car accidents. The lack of insurance could have compromised her care, ruined her financially, and put extra pressure on us just as we're trying to settle on a retirement date.

My dad wasn’t always right. But I think he nailed this one.

Dana Ferris and her husband live in Davis, California. She’s a professor in the writing program at the University of California, Davis, and is the author or co-author of nine books on teaching writing and reading to second language learners. Dana is a huge baseball fan and writes a weekly column for a San Francisco Giants fan blog under the nom de plume DrLefty. When not working, she also loves cooking, traveling and working out. Follow Dana on X (Twitter) @LeftyDana and check out her earlier articles.

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Friends After All

FLAPJACKS IS LITERALLY on the other side of the tracks. The place is a throwback to the diners of the 1950s, when waitresses wore white aprons and took orders on little green pads, and where the red vinyl seats were cracked.

Charlie and me. I’ve been meeting Charlie at Flapjacks for weekly pancake breakfasts since I partially retired seven years ago. I spot him in our back booth and slide in across from him. He’s staring at his iPhone like it was a crystal ball.

“Charlie, what are you trying to find out? You’re not into individual stocks and your mutual funds don’t trade during the day.”

“Hey, Steve, I’ve been checking on Windsor Fund’s closing price a lot lately. I’ve hardly even looked at it for many, many years, but my first required minimum distribution is coming around. I thought I should get familiar with it again before I do anything.”

“Vanguard Windsor? Holy smokes, are you still in that thing? I told you about it 50 years ago. You must be a millionaire by now.”

Charlie leaned over and gave me a high five. “I started putting in dribs and drabs in graduate school and then used it in my traditional IRA after I got that hospital job. Steve-o, you must have made out like a bandit—you got in even before me.”

“No, not so, Charlie. Too many lunch-hour burritos at Schwab. I was a latecomer to the party.”

“Why did it take us until retirement to become such close friends, Steve? We have so much in common—backgrounds, interests, profession.”

“Charlie, you’re forgetting how I was front and center at the ethics review that almost got you suspended.”                                     

“Yeah, it’s still hard for me to go there. And there was something else, too. You knew a lot about real estate, as well as the stock market. It was intimidating.”

I was shocked. “Same for me. Remember when you looked at a hairline crack in the foundation of one of my duplexes? I was afraid I was in for a $15,000 repair. You immediately saw that the drainage problem causing it could be solved for less than $1,000. No doubt about it, Charlie, you’re the son my father always wanted.”

All relationships are imperfect and frequently have a checkered history. In retirement, we have the opportunity to renew them—and the perspective needed to understand the obstacles to doing so.

Betrayal. “Hi, Steve, it’s Jennifer from Dr. Houston’s office. Something important has come up, and Ken would like to have you stop by.”

Oh, great. You’re a psychologist and the psychiatry chair invites you in for a visit. You never know when the boom is going to be lowered.

“Steve, I’d like your input on what looks like something unethical. Ken handed me the form that faculty use to change a student’s grade. Is that your signature? Jennifer thought it looked off.”

My breath cut short. The form was all filled out. Charlie Seibel’s B in my psych stats course had been changed to an A. I was about to blemish a person’s career and maybe his whole life. “No, I didn’t sign that, Ken.”

Later that day, Charlie admitted the signature was his. Jennifer hastily arranged a meeting to consider whether this ethical breach warranted his expulsion from the medical school.

All of us have to endure violations of our trust. We shouldn’t deny the anger and hurt. But we should also ponder the impact of any disciplinary measure on the offender’s life.

The tribunal. By the time I arrived, the three other faculty members assigned to determine Charlie’s future were already seated around a small conference table. They were Ken, Elizabeth the head of psychology training, and Harris the dean of the medical school.

Ken opened things up. “An unhappy situation for everyone. Let’s see if we can reach a consensus on where to go from here.”

He turned to Liz. “I’m dumbfounded and outraged. He’s an embarrassment to my program and my students. As far as I’m concerned, Charlie has to go.”

Harris was regarded as thoughtful and measured. “I’ll chime in with a less-dire idea. We’ve all lied or cheated at some point in our lives. Truth be told, I veered off track earlier in my career and that, of course, appeared in my file. I had to explain my lapse in the interview for my current position. Charlie’s a good student with no previous instances of ethical frailty. I would favor a stern warning letter and probation through his graduation.”

Harris then swiveled to face me. “I’d like to hear from you, Steve. After all, you’re the aggrieved party.”

“Harris, I really don’t feel violated. This wasn’t about me. It’s something inside Charlie. As I teenager, I plagiarized part of a book review of The Grapes of Wrath from CliffsNotes. Mrs. Goldman caught it and scolded me in class. My embarrassment still lingers.”

I leaned toward leniency, but knew I had to take into account Liz’s preference for a more severe punishment. “I’m thinking a record in his file, a year’s suspension and then extended probation. And, of course, we’ll strongly encourage therapy. Can everyone feel comfortable with that?”

Liz had me in her sights. “I’ll relent on one condition. We require a diary of remorse and personal growth that we review after the year of suspension. Then we make a final decision.”

The rest of us nodded in agreement. I left the conference room feeling relieved, and hoping we had discharged our responsibility with accountability and sensitivity.

Morality can be relative, so be mindful that others may reach a different conclusion than the one you draw. Charlie returned for his doctorate and has become one of the area’s leading authorities on eating disorders.

Thrown out trying to steal. “You better not leave the store with those, son. I could call the police, but I’d rather call your mother instead.”

I immediately ran to put the packs back in the box. “Oh no, please don’t do that. I’m sorry, Mr. Thurman.”

“You’re Stevie, right? Your grandma comes in here all the time to get you kids baseballs because you’re always losing them in the bushes. I don’t think your folks will be happy to hear their oldest was caught stealing baseball cards from Thurman’s Toyland. What’s your phone number?”

Mr. Thurman had already called by the time I got home. My mother was waiting at the door. “Stevie, how could you do that? It’s so wrong. I’m going to have to tell your father.”

Awareness of blemishes on your own moral record should promote humility when judging others. Empathy need not mean naivety or shrinking from delivering a deserved punishment, but rather the capacity for restraint. We shouldn’t blindly retaliate.

Friendship is not a right. You have to work at it through self-examination and forgiveness, knowing that the wounds the perpetrator suffered early in life may be deeper than yours.

Steve Abramowitz is a psychologist in Sacramento, California. Earlier in his career, Steve was a university professor, including serving as research director for the psychiatry department at the University of California, Davis. He also ran his own investment advisory firm. Check out Steve's earlier articles.

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Words to Remember

"WE CANNOT GET RICH doing dentistry, but we can get rich investing what we make in dentistry." A nationally recognized lecturer on dental-practice management shared that piece of advice with me some 40 years ago.

I’d been out of dental school for a year when Dr. Dick Klein spoke at our local dental society’s annual meeting. The meeting's organizer was a friend. He asked if my wife and I would take Klein and his wife out to dinner after his presentation. The thought of actually having to talk to and socialize with this nationally renowned dentist scared the hell out of me. Just thinking about it caused stomach unrest for a week.

Klein’s speech offered a standing-room-only audience tips on running a dental office efficiently and increasing productivity. Little did I know the dinner that night would change my life.

To my great surprise, the very first hand shake with Klein put me at ease. He was a humble and genuinely nice guy. We found out that we shared an ex-athlete’s interest in sports, as well as strong Italian family backgrounds.

The dinner turned out to be relaxed, fun and enjoyable. It wasn’t until toward the end of the meal that the conversation turned to dentistry. In hindsight, after practicing dentistry for 40 years, I realize his words of wisdom were the reason for my success.

He started with a comment, “We can’t get rich doing dentistry, but we can get rich investing what we make in dentistry.” He then elaborated: “Only so much physical dentistry can be produced in a 32-hour week. Anyone can make a good income doing dentistry, but what one does with that income is what will make a difference.”

He offered this advice: “You’re used to a student’s lifestyle, so keep living like that for a few years.” When I mentioned that my wife was a teacher, he cited statistics that showed financially successful dentists were often married to teachers.

He stressed that the most important years would be the first 10. A practice grows slowly. Even though you’re making a moderate income now, it will go up steadily. Live on your wife’s salary, save for a large down payment on a house, open a Charles Schwab account and start adding to a good mutual fund. Live below your means and, as your salary increases, pay off the house and keep investing.

We didn’t, however, go to dental school to live like paupers, Klein added. We should enjoy life, have fun and spend money on things that will give us the most enjoyment, especially family, but always invest.

My wife and I followed his advice almost exactly as he laid it out that evening. We rented a small house for 10 years, as I built my practice. We then bought a beautiful home, making a large down payment and paying it off in four years. My wife’s job was a huge advantage, thanks to all the benefits the school district provided. Every year-end bonus from my dental practice went directly into our investments.

I’m now retired. I loved being a dentist and all the wonderful things dentistry allowed my family to do. I owe Klein a huge “thank you” for the wonderful advice he offered during a dinner with a young dentist and his wife so many years ago.

Dr. Gary Kelly graduated from the University of Washington’s dental school in 1981. He practiced general dentistry, with an emphasis on complex restorative implants, before selling his practice in 2013. He continues to consult on full arch implant cases.

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Stop the Fussing

BILLY JOEL WROTE a song that declares, “I love you just the way you are.” But as parents, sometimes it isn’t easy to say those words about our children.

We’re supposed to train them to succeed in life. We all probably think we’re excellent trainers, so—when our children don’t get it—it must be their fault. We did our part, so why don’t they learn?

For parents of special needs children, things are different, but also similar. We also have to train our children for life. But they don’t learn or perform as “typical” children do. But good parents persevere, training their children in different ways or with more intensity. We all need to get to the finish line, so we can say, “I did my part.”

But what happens if we never get to the finish line? What happens if the usual events that parents enjoy—graduations, marriages, grandchildren—never happen? That’s what I was facing.

Luckily, in recent years, I’ve been able to look at my life differently. I’ve accepted my son for who he is, not for what he could be. I was afraid I’d feel I was giving up, but the opposite happened. I started to look at him as complete—that he couldn’t be anything more than what he is.

I believe we all want to be better. Take our finances. We read books, try to save more, buy things when they’re on sale and take out loans when it makes sense. But when do we stop trying to make our finances better, and instead accept them for what they are? To me, the goal of accumulating money and having wealth is to live a comfortable life. We do it so that, at some point, we can stop struggling.

Thinking we can always improve our finances—or always improve our children—can be a lifelong mission. But should it be? Wouldn’t we be better off looking at our children as complete or our financial plan as all set?

I no longer feel I have to fix my son. I no longer feel I need to ensure he can do everything, because he can’t. Whatever he can’t do, I’ll do it instead. The uncertainty for me: Will he be able to figure things out when I’m not around? I'm not sure. But at least I get to enjoy him while I’m still here.

We can all fuss with our lives, or we can just enjoy things as they are. Enjoyment is so much better.

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From COW to KARS

RETIRED HEDGE FUND manager Jim Cramer is the host of Mad Money, a staple of financial television. For years, critics have derided his investment recommendations—to the point where there’s now a fund designed specifically to bet against him: the Inverse Cramer Tracker exchange-traded fund (symbol: SJIM).

For investors who see Cramer as the P.T. Barnum of finance, this fund offers the ability to make bets that are precisely the opposite of what Cramer recommends. “We watch Mad Money so you don't have to,” reads the fund's website. “Find out what Jim likes so you can sell it, and what he doesn't like so you can buy it.”

While colorful, the Cramer fund is just one of more than 500 new exchange-traded funds (ETFs) introduced last year. Investors in the U.S. now have more than 3,500 ETFs to choose from. Among them: COW to invest in agriculture and KARS to bet on electric vehicles. The latest development: The SEC recently approved 11 new bitcoin-tracking ETFs.

With thousands of options, you may be wondering how to make sense of the investment universe. Which funds are worth considering? To help answer this, I would start with this basic principle: Every investment can be evaluated through three simple lenses. In order of importance, they are:

Risk level
Growth potential 
Tax efficiency

Since risk is first on this list, that—I think—is the easiest way to decide if an investment is worth your time. How can you assess risk? While every investment is different, most can be plotted somewhere on the spectrum outlined below—going in order from most risky to least:

Alternatives. In the world of investments, stocks, bonds, cash and real estate represent the basic building blocks. But there are many alternatives, including gold, commodities, managed futures and cryptocurrencies, all of which are available in the form of exchange-traded funds. Some ETFs are even set up to mimic hedge funds and other strategies typically found only in private funds.

These alternatives carry above-average risk, in my view. Why? In most cases, the underlying investment is one that lacks intrinsic value, meaning the investment doesn’t produce income in the way that stocks produce dividends or bonds produce interest. That poses a risk because it means there’s no logical basis for valuing these assets, and thus there’s no floor to support their prices.

That, for instance, is why the price of bitcoin is so volatile. Unlike a stock or a bond, there’s no fundamental basis for determining the “right” price for bitcoin. That makes cryptocurrencies and other alternatives among the riskiest investments out there.

Leveraged single stocks. Stocks generally do have intrinsic value, and that makes them inherently less risky than alternative asset classes. But any individual stock still carries risk simply because adverse events can affect any one company. Unfortunately, Wall Street has found a way to amplify this risk.

Suppose you like Tesla. You could buy the stock, but if you wanted to dial up the risk in your portfolio, you could buy a fund like GraniteShares 2x Long TSLA Daily ETF (TSLR). This fund uses leverage to promise investors 200% of the daily performance of Tesla’s shares. If Tesla’s stock gains 5%, this fund should rise 10%. If, on the other hand, you have a negative view of Tesla, GraniteShares offers a fund (TSDD) that promises 200% of the inverse performance of Tesla’s stock.

Some funds take this a step further, using leverage to bet on alternative investments. That’s what the 2x Bitcoin Strategy ETF (BITX) does. This is very far out on the risk spectrum.

Leveraged index exposure. Using leverage to bet on a single stock is very risky. Lower down the risk ladder are funds that use leverage to bet on the entire market. A fund like Direxion Daily S&P 500 Bull 3X Shares (SPXL) is designed to give investors 300% of the daily return of the S&P 500-index. Last year, when the S&P 500 rose 26%, this fund soared 69%.

The fund’s cousin, the Direxion Daily S&P 500 Bear 3X Shares (SPXS), is designed to do the opposite: It provides 300% of the inverse of the S&P 500’s daily return. Last year, it declined by 46%.

Narrow indexes. Investment commentators—myself included—spend a lot of time talking about the differences between actively managed funds and index funds. The reality, though, is that there are thousands of index funds, and some are much riskier than others.

If you’re evaluating an index fund, make sure it isn’t limited to a narrow corner of the market. Very common, for example, are funds that hold stocks in just one sector—technology, for example. That can be risky because stocks in a given industry tend to rise and fall together. Instead, look for a broadly diversified fund, such as one that includes the entire S&P 500-index of large-cap stocks, or one that covers the entire U.S. market.

Actively managed funds. Why do actively managed funds have so many detractors? The problem is that they rely on human judgment, and no one can see the future. That’s why—counterintuitive as it may seem—index funds, which have no real manager, have beaten the performance of funds run by well-informed, hard-working and highly compensated managers.

To be sure, some actively managed funds do outperform each year, so it’s important to look at industry-wide data. Actively managed funds, on average, tend to underperform index funds while generating larger annual tax bills.

Broad-market index funds. How can you avoid all the risks outlined above? The ideal investment, in my opinion, is a simple, broadly diversified stock or bond index fund, such as one that tracks the S&P 500. While no investment is without risk, my view is that funds like this carry the least risk. That’s because stocks and bonds have intrinsic value, there’s no leverage amplifying the risk, the fees are low, they’re tax-efficient and there’s no risk of misjudgment by an active manager.

Postscript: It turns out Jim Cramer may have had the last laugh. Last week, the manager of the Inverse Cramer ETF, which was launched just last year, announced that it’s shuttering the fund.

Adam M. Grossman is the founder of Mayport, a fixed-fee wealth management firm. Sign up for Adam's Daily Ideas email, follow him on X (Twitter) @AdamMGrossman and check out his earlier articles.

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Called to Account

MY FAMILY HAS BEEN regularly visiting a remote corner of southwest England since 1968, when I was five years old. My maternal grandparents retired to the area, and for a while my parents owned a holiday house nearby. It is, to me, the world’s most beautiful place.

Decades ago, while walking the country lanes, I came across the ruins of a church that was under the protection of a group called Friends of Friendless Churches, a name that made me chuckle. Lately, I’ve been thinking we need a similar group in the U.S.—to offer support for traditional, tax-deductible retirement accounts, which also seem to be notably friendless.

In recent years, I’ve seen repeated comments from retirees lamenting the big tax bills they now face as they draw down their traditional 401(k)s and IRAs, and how they wish they’d never funded these accounts. Many are taking evasive action, including converting big chunks of their traditional retirement accounts to Roths, something I’ve also been doing. Still, all the handwringing strikes me as overdone, because it ignores four often-overlooked benefits that traditional 401(k)s and IRAs offer.

Tax-free growth—or better. Roth accounts, which don’t offer an initial tax deduction but do give investors tax-free growth, were introduced in 1998. That means many of today’s retirees had no choice early in their career but to fund traditional retirement accounts, where you get an initial tax deduction but all withdrawals are taxed as ordinary income.

But here’s what folks forget: Tax-deductible retirement accounts can also give you tax-free growth, just like a Roth. If you’re in the same tax bracket when you draw down a tax-deductible retirement account as when you funded it, the initial tax deduction effectively pays for the final tax bill. In fact, if your tax bracket in retirement is lower than it was during your working years, you can come out ahead, making more from the initial tax deduction than you lose to the final tax bill. You can read an explanation of the math here.

One way you can take advantage of a lower tax bracket in retirement: convert part of your traditional IRA to a Roth. I made big Roth conversions in 2022 and 2023, and I’ll probably do another one this year, with a view to shrinking my required minimum distributions once I’m in my 70s.

I’ll need to be more careful starting in 2026, because I’ll be turning age 63 that year. The issue: Boosting my taxable income with Roth conversions could drive up my Medicare premiums once I turn age 65. On top of that, the 2017 income-tax cuts may sunset at year-end 2025. In any case, I don’t want to overdo the Roth conversions—and I certainly wouldn’t want to have everything in Roth accounts—because there are some good reasons to keep a decent sum in traditional retirement accounts.

Filling those lower brackets. Many folks love the idea of paying zero income taxes. They shouldn’t. You don’t want to pay high taxes during your working years and then find yourself paying nothing in retirement. Instead, ideally, you pay a similar tax rate throughout your life. Filling up tax-deductible retirement accounts during your working years and then draining them in retirement can allow you to do just that.

Are you retired with little taxable income? Drawing down your traditional retirement accounts or converting them to a Roth can allow you to take advantage of the 10% and 12% federal tax brackets, which strike me as a bargain. To hit the top of the 12% tax bracket in 2024, a married couple could generate as much as $123,500 in income, after factoring in the standard deduction. What if you had all your money in Roth accounts? You wouldn’t be able to take advantage of these lower brackets, which would be a shame after a career during which you might have paid taxes at 22% or higher.

Giving back. Money in a traditional IRA would also allow you to take advantage of qualified charitable distributions (QCDs) once you reach age 70½. A QCD is one of the most appealing ways to support your favorite causes.

True, you won’t get a tax deduction for your charitable contributions. But the money that goes directly from your IRA to a charity avoids all income taxes, which means your gift is effectively tax-deductible. On top of that, the withdrawal counts toward your required minimum distributions, which these days kick in at age 73, and you can get the tax savings while also taking the standard deduction, a double win not available for regular charitable contributions. In effect, by funding a tax-deductible retirement account and then later making QCDs, you get a handsome tax break during your working years, plus you avoid the tax on all subsequent growth.

What if you’d funded a Roth instead? Sure, you could make a QCD from your Roth. But you wouldn’t be doing the charity any special favor—it doesn’t pay taxes whether the money comes from a Roth or a tax-deductible account. You, on the other hand, should be kicking yourself, because you effectively missed out on a valuable tax break by funding the Roth.

Paying medical costs. Many of us will face steep medical costs later in retirement. If those costs exceed 7.5% of adjusted gross income, they’re deductible on Schedule A. The expenses that qualify for the deduction include many related to long-term care.

Thanks to the deduction for medical costs, you could potentially tap a traditional retirement account and pay little or no tax on your withdrawals. What if you avoided traditional retirement accounts or earlier converted everything to a Roth? The medical deduction would be worthless to you.

The upshot: Most folks should go for tax diversification, funding both traditional and Roth accounts during their working years. And while it’s tempting to make big Roth conversions early in retirement, especially if you find yourself in a low tax bracket, don’t overdo it. In your later years, you may face hefty medical expenses, find yourself in a low tax bracket or want to make QCDs—and, at that juncture, you could put your traditional retirement accounts to good use.

Jonathan Clements is the founder and editor of HumbleDollar. Follow him on X (Twitter) @ClementsMoney and on Facebook, and check out his earlier articles.

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Pizza, Anyone?

AND NOW FOR SOMETHING completely different: I'd like to try a HumbleDollar meetup on Monday, March 4, at 5 p.m. at Pizzeria Vetri, 1615 Chancellor Street, Philadelphia.

All attendees will be responsible for their own bill, but it shouldn't be wildly expensive, not least because happy hour runs through 6 p.m. I believe Vetri has the best pizza in Philly. The restaurant doesn't take reservations, but the manager assures me that things should be quiet at that time. Be warned: Pizzeria Vetri has more than one location, so make sure you go to the right one.

If you plan to attend, please shoot me an email at jonathan@jonathanclements.com. That way, if there's some glitch, I can let you know ahead of time. If the March 4 meetup proves popular, I'll do it again over the summer—and it could even become a regular event here in Philly and perhaps an occasional event in other cities, depending on my travel plans.

For those with good memories—and there seem to be a lot of you—I had mused about holding a HumbleDollar conference. I even got as far as checking out a few venues and getting pricing. But it became clear that I couldn't pull it off at a price point that would appeal to a broad swath of HumbleDollar's thrifty audience. Indeed, even the excellent Bogleheads Conference—which I'd recommend—costs almost $600, plus travel, hotel room and meals, including $100 for the Saturday night banquet.

Still, what strikes me about the Bogleheads Conference, as well as others I've attended over the years, is that folks enjoy them less for the financial insights and more for the socializing. With any luck, pizza in Philly will (pun intended) satisfy that appetite.

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Closing Doors

MY FAVORITE CLASS freshman year in college was introductory psychology. I found the lectures interesting, the textbook fascinating, and the course much less time-consuming than my engineering classes. Based on my positive experience, I decided I’d take a class called psychology of personality as an elective. What I didn’t realize was that many students considered the professor to be something of an oddball.

My first—and only—day in the class was surreal. The professor kept repeating that his class was “designed to be a real system.” Multiple times, he exclaimed, “The sincere student will experience closure at the conclusion of this real system.”

Apparently, grades for the class weren’t determined on the basis of tests, but on some nebulous project requirement. At the end of the hour, the professor mentioned something about many students being “weirded out” of his classes. That was me. I immediately dropped his class and signed up for economics.

While I never regretted ditching that second psychology class, the professor’s statement about “closure” stuck with me. What was he talking about? It seems closure is a fairly complex concept in psychology. Don’t ask me to explain the intricacies—remember, I dropped the course.

The best working definition I’ve found: “Closure is the sense of resolution or completion of a life event, problem, or situation.” There are several important areas of my life where I’ve desired and, to some degree, achieved closure.

I was a driven student in high school. Good grades and college board test scores were a major part of my adolescent self-image. I achieved my academic goals, finishing high school with a perfect transcript, Scholastic Aptitude Test (SAT) scores that exceeded my wildest fantasies, and a hefty college scholarship. I felt closure at graduation, but it was an uncomfortable emotion. For some reason, on that day, the academic achievements for which I’d worked so hard seemed meaningless.

My father died in 2001 and my mother in 2013. I had a good relationship with both of them. Although I grieved their passing, I didn’t feel I had unresolved issues with either. I was able to spend significant time with my father in the months leading up to his death. I asked a lot of questions and wrote down his answers. This process was a blessing that eventually helped me to feel closure in our relationship.

My mother, unfortunately, had dementia for years before she died at age 91. Still, when she died, I did experience closure. I had been grieving the gradual loss of my mom for years, and this was just the final stage.

Another area of my life where closure was important to me was ending my 38-year career with my first employer. For years, I imagined how I might feel on my retirement day. Would it be bittersweet, recalling the emotions I felt at my high school graduation? Would I regret retiring? I almost retired after year 36 to work for another company. The decision, however, didn’t feel right, and I ended up declining the job offer.

When I finally did retire two years later, I was satisfied the time was right. To help further my sense of closure, I wrote a piece looking back on my career and posted it on LinkedIn, later adapting it for a HumbleDollar article. My coworkers also helped me by holding a farewell luncheon.

In addition, they gave me a picture of the nuclear power plant where I’d worked, which they all signed, along with their congratulations and best wishes. Strangely, my last day in the office didn’t generate much emotion. I quietly turned in my computer and drove the familiar route home that I’d traveled almost 10,000 times before.

Psychologist Gene Cohen identified a phase of aging he calls the “summing-up phase.” This phase has been described as “a time of review and resolution and heralds a desire to give back. The review is of one’s life with recognition of its meaning. It is a time of putting photos in albums, of writing memoirs.”

I may be a little young for this phase, which according to Cohen typically occurs between the late 60s and the 80s. Still, I find myself periodically drawn to reflect on the big picture of my life story, which is closer to its end than its beginning. I suspect many of my fellow HumbleDollar writers and readers can relate.

Ken Cutler lives in Lancaster, Pennsylvania, and has worked as an electrical engineer in the nuclear power industry for more than 38 years. There, he has become an informal financial advisor for many of his coworkers. Ken is involved in his church, enjoys traveling and hiking with his wife Lisa, is a shortwave radio hobbyist, and has a soft spot for cats and dogs. Check out Ken's earlier articles.

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