Jonathan Clements's Blog, page 148

Lost in Translation

IN THE 1980s, I SPENT nearly 12 weeks in an Australian hospital. I learned that language is not always universal. I was a corporate auditor for General Electric, and the company had sent me to Australia for a three-month assignment. To Yankee ears, Australians have an accent. But at least we speak the same language. Or so I thought.

Within a week of getting to Australia, I was diagnosed with subacute bacterial endocarditis (SBE), a serious bacterial infection of the blood. I was born with a slight heart defect which makes me more susceptible to SBE. Prior to about 1955, it was universally fatal. I don’t blame the Aussies for my infection. I’m pretty sure I contracted it before going to Australia.

The general practitioner said I needed to go to a hospital and be hooked up to intravenous penicillin 24/7. I could go to a private hospital, which would be more like a U.S. hospital, or to a hospital for veterans. I asked which had the best equipment and doctors. He said the veterans’ hospital, so I went to Concord Repatriation General Hospital in Sydney. I had never been in the military. I have no idea why I was allowed to be treated at an Australian veterans’ hospital.

Nurses are not nurses. There were no private or even semi-private rooms in the hospital. I was in a ward with 24 beds. Nurses would walk up and down between the rows. If we needed something, it was not unusual to call out for the nurse. I heard other patients call out “nurse” or “sister.”  Thinking “sister” was somewhat derogatory, I always said “nurse.”

One day, the head “nurse” confronted me.  She asked why I called her a nurse; she was a sister. I learned that, in Australia, “nurse” refers to what we would call a student nurse. Once a nurse completes training, she is a sister. Because this was a teaching hospital, we did have “nurses”—meaning student nurses—but most of the nursing staff were “sisters.”

Question: What do you call a male nurse in Australia? Answer: sister. The term sister is non-gender specific. At least a quarter of the sisters were male. It was completely acceptable to call a male nurse “sister.” I was insulting them by calling them “nurse.”

Doctors are not always doctors. After the head sister got me straightened out about calling her sister, not nurse, she asked why I called my doctor “doctor.”

“Because he’s a doctor,” I stammered.

“No, he is a mister,” she replied emphatically.

It took me several more minutes to understand. In Australia, a specialist is no longer a doctor. He or she is a mister or missus.

Not only had I been insulting all of the nurses by calling them “nurse,” I had also been insulting my doctor by calling him “doctor.”

Several years ago, I told this story to a business professor colleague, who was English and had just come to the States. He looked at me with amazement. “You mean you don’t call the best doctors mister or missus?” I assured him we did not. He explained that he had been looking for an eye specialist in St. Louis, our nearest large city, and he was frustrated that all he could find were doctors. None was a mister or missus. He assumed this meant St. Louis had no top-flight eye doctors.

Theaters are not always for shows. At one point, I completely lost my appetite and began to become jaundiced. My doctor decided to inject my blood with dye and take some X-rays.

Soon after, a sister came to my bedside and said the doctor wanted me to go to theater that afternoon. I told the sister that I appreciated the doctor’s concern. I was glad he was trying to cheer me up, but I really didn’t feel like going to the theater. I also silently wondered what type of movies they would show to veterans in a military hospital. All I could imagine was a movie that told soldiers not to have sex with the locals to avoid venereal diseases. The nurse emphatically told me that I would be going to theater that afternoon. Again, I graciously declined.

I finally understood. “Theater” is what we would call “operating room.” In the early days of surgery, it was common for medical residents to stand on a second-floor balcony and watch the surgeon work. It was a theater in a very real sense. They had found an aneurysm in my abdomen and wanted to remove it before it ruptured. I did go to theater that afternoon. Instead of watching a show, I was the show. The operation was a success.

That wasn’t the end of the idiosyncrasies I encountered. Here are four more:

“Tucker” is food or appetite. If I didn’t eat much, the sister would often say, “Off your tucker today?” The first time she said this, I had absolutely no idea what she meant.
“Vegemite” is a brown, thick paste made from brewers’ yeast and spread on toast. Similar to English Marmite, it tastes horrendous—unless you’re Australian or English.
“Wheetabix” is the brand name of a popular cereal. Somewhat similar to our Shredded Wheat.
There was one television in a common lounge for the 24 of us in that ward. An afternoon rerun was Skippy the Bush Kangaroo. It was similar to our Lassie, but instead of a dog saving the family from some catastrophe, it was a kangaroo.

I should have been on intravenous penicillin for just four weeks. But for some reason, I wasn’t getting better. At the six-week point, GE paid for my wife to come to Australia. She was there for the last two weeks of May and almost all of June. While it was turning to summer in the northern hemisphere, it was getting colder in Australia and she had not packed for winter.

My wife set by my bedside faithfully. I did persuade her to take one day off and visit a local zoo. Koalas sleep about 20 hours per day and always look peaceful. She learned that Koalas get enough moisture from Eucalyptus leaves that they can go for weeks without leaving a Eucalyptus tree. She was also told that Eucalyptus leaves contain a mild narcotic. Those peaceful looking Koalas are happy because they sit there happily ingesting narcotics.

For what it’s worth, the Australian Koala Foundation disagrees.

Larry Sayler is the only person with a Wharton MBA who also graduated from Ringling Bros. and Barnum & Bailey’s Clown College. Earlier in his career, he served as CFO for three manufacturing and service organizations. For 16 years before his retirement, Larry taught accounting at a small Christian college in the Midwest. His brother Kenyon also writes for HumbleDollar. Check out Larry's earlier articles.

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The Medicare Maze

I GREW UP IN ENGLAND, with health-care coverage provided by the National Health Service, so I’m extremely sympathetic to people calling for “Medicare for All.” Still, I do wonder whether they realize that Medicare is neither cheap nor simple. My medical costs in 2021 were more than $10,000, with half of that for a single drug. And it would have been even more without the $3,000 a year kicked in by my former employer.

Since I turned age 65, I’ve experienced three varieties of Medicare coverage, and I need to make another coverage decision soon. I thought HumbleDollar's readers might have opinions about my choices—although it’s a gamble either way. To begin, here’s a brief outline of the parts and plans that comprise Medicare.

Medicare Part A is hospital coverage. It covers in-patient room, board and nursing care in a hospital, nursing home, skilled nursing facility, hospice and sometimes at home. One could argue that Part A is free since, if you’re eligible for Social Security, you don't pay premiums for Part A. This is the only time where having a spouse affects your coverage: You can qualify based on your spouse's earnings. But Part A really isn’t free. There’s a $1,600 deductible this year for each “hospital benefit period,” plus there are copays after 60 days in the hospital and after 20 days in a skilled nursing facility.

Medicare Part B covers outpatient services, such as doctor visits, preventive care, mental health care and certain prescription drugs. Most recipients pay a monthly premium of $164.90 for Part B in 2023. If your modified adjusted gross income, as of two years ago, was above $97,000 for a single filer or $194,000 for joint filers, you’ll pay more. These premium surcharges are known as IRMAA, short for income-related monthly adjustment amount, and they also apply to Part D, whether you sign up for it or not.

On top of all this, there’s the $226 annual Part B deductible. The real wildcard, though, is the copays. Patients are responsible for at least 20% of the Medicare-approved cost of their care, with no annual maximum. Note that Part B does not cover dental, hearing aids or glasses.

Medicare supplement insurance, or Medigap plans, are policies sold by private insurance companies that are intended to cover the gaps—such as copays and deductibles—within regular Medicare. These policies come in bundled packages labeled A to N, although some bundles are no longer offered. Federal law specifies the minimum coverage for each plan, with some insurers or states adding extras.

Medicare Part D is Medicare’s prescription drug program, available since 2006. It has a maximum deductible of $505 this year, variable copays and no annual maximum. One of Medicare's quirks is that you can only change your drug plan once a year, but the insurance company can change its formulary—its list of covered drugs—whenever it likes. Good luck figuring out in November what drugs you’ll need next August.

Medicare Part C is also known as Medicare Advantage. These private insurance plans bundle services to take the place of Medicare A and B, Medigap and usually Part D. The government pays more per person for those enrolled in these plans than it does for traditional Medicare, so these plans can offer additional benefits, such as some dental care or gym membership. Every plan is different and can change each year. You should compare plans during each year’s open enrollment period and then pick one for the year ahead.

My Medicare choices? When I took early retirement at age 53, an important consideration was the group retiree medical coverage offered by my soon-to-be ex-employer. At 65, when I had to sign up for Medicare A and B, I was able to keep my former employer’s plan as secondary coverage.

This happy state of affairs ended a few years later, when the company once again downgraded its support for former employees. It replaced its group coverage with a $3,000-a-year stipend. My employer’s prior health-care coverage was deemed “creditable,” which meant Medicare treated me as if I were age 65. Insurance companies had to accept me if I wanted a Medigap plan, and I wasn't penalized for signing up for a drug plan after 65. Typically, if you delay, you pay a penalty in the form of higher lifetime premiums.

I used my employer’s $3,000 stipend to sign up for Medigap Plan F, plus a dental plan, a vision plan and a Part D drug plan. I was pleased with Plan F, which allowed me to see any doctor who accepted Medicare and required no deductibles or copays.

Congress eventually closed Plan F to new enrollees, thinking it too generous. Worried that the Plan F coverage pool was becoming smaller, older and sicker, I tried to switch to Plan G. That would have covered everything except my Part B deductible.

Unfortunately, I failed the medical underwriting, which meant I’d have to pay a significantly higher premium for Plan G. In some states, I wouldn’t have had a medical screening, but it’s the rule in mine. Later, I was able to switch from UnitedHealth Plan F to Humana Plan G when Humana temporarily suspended underwriting.

But then last year, my employer stopped paying the $3,000-a-year stipend and switched us to a group Medicare Advantage preferred provider organization. It's a good plan. I pay zero additional premiums and my annual out-of-pocket maximum is capped at $750. I can see any doctor that accepts both Medicare and the plan, it has a generous drug plan and covers unlimited skilled nursing days.

Of course, there’s no guarantee the plan will stay so generous. If I opt to switch back to traditional Medicare before the end of the year, I can get a Medigap policy without medical underwriting. If I try to switch after this year, I'll once again be subject to underwriting, which I would once again fail.

If I switch, my premiums next year will likely be at least $2,500—the cost of a Medigap policy, a Part D drug plan, and vision and dental coverage. It's possible that my rheumatoid arthritis has gone into remission, so the money I’ve been spending on medication would cover the premiums. It's also possible it hasn’t gone into remission, in which case my drug costs would be an additional $3,000 a year if I switch to traditional Medicare.

Right now, my Medicare Advantage plan charges $10.35 per prescription once I’ve spent enough on prescriptions for the year to reach the “catastrophic coverage” level. Meanwhile, the Part D plans available to me would charge 5% of the retail cost once I’m in catastrophic coverage. Rheumatoid arthritis drugs can easily retail for more than $6,000 a month. But if the $2,000 cap on Medicare drug costs included in last year's Inflation Reduction Act actually goes into effect in 2025, that would sharply reduce my potential out-of-pocket cost.

For someone who grew up with the National Health Service, the cost and complexity of Medicare is confounding. I’ve left out a lot of details, and you’ll find plenty of potential pitfalls in the fine print. Also, some states have different and more generous rules.

I urge anyone who is turning 64 to read the latest edition of Medicare for Dummies and to arrange a consultation with a State Health Insurance Assistance Program counselor when deciding on Medicare coverage.

Kathy Wilhelm, who comments on HumbleDollar as mytimetotravel, is a former software engineer. She took early retirement so she could travel extensively. Born and educated in England, Kathy has lived in North Carolina since 1975. Her previous articles were Planning My Exit and Continuing Care.

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Never Stops Raining

SELLING A HOUSE should be easy. Hire a realtor, find a buyer, the realtor takes a percentage and it’s a done deal. If only.

Try this version instead. Before we could sell our house in 2020, we had to fix a list of defects, including power washing the roof, having a dead tree removed, digging up an already drained oil tank and tearing up the pavers in the driveway to get at the tank. I bet you wouldn’t have planned for those expenses. I sure didn’t, but they set me back around $13,000.

Shortly afterward, my wife’s car—for which she had great affection—developed electrical problems. No mechanic or dealer wanted to tackle the work, not even for the estimated payment of $10,000. The solution was obvious. Buy a new car.

What do these expenses have in common? They were all unplanned and they all happened to a retiree—me. It never ends.

My water heater just died. It was 12 years old and cost $10,000 to replace, in part because it’s in a closet and hence difficult to work on. Earlier this year, I had to replace the ignition coils on my car at 100,000 miles. I also had the parking brake repaired during the car’s routine annual service. It all came to around $3,000. What’s next?

My air-conditioning unit has been repaired twice for leaks in the past two years. Many of my condo neighbors have already replaced theirs and they’re all the same age, so the unit is living on borrowed time. Last year, I got an estimate that a replacement would cost around $15,000. I’m waiting for a new one—an estimate, that is.

I seem to recall reading—or maybe even writing—that living in a condo saves you money on maintenance costs. I take it all back. The homeowners’ association fee is going up again, too.

Have I made the case for setting aside a pile of money for retirement’s rainy-day events? As you and everything you own gets older, the risk of the unexpected just gets worse. Keep in mind that financial emergencies have no respect. A water heater doesn’t care how much income you have or how old you happen to be.

I retired in January 2010. I live on my pension and Social Security. That income adequately covers my basic expenses, with some money left over for discretionary spending, but there it ends. I need to rely on savings for life’s emergencies.

According to a Bankrate survey, 36% of adults have more in credit card debt than emergency savings. Only 43% would pay a large emergency expense from savings. Should we assume retirees are in better shape than their working brethren?

Nobody saves in retirement, I’m told, because it’s time to spend. Good luck with that. If your retirement income doesn’t have room for savings—meaning some excess so you can keep refilling your emergency fund—then I’d say you aren’t ready to retire.

Can’t save in retirement? Consider one person’s comment from my blog: “I’m able to save $1,000 per month out of my retirement income of $3,601. Social Security and U.S. Air Force inflation-adjusted retirement income have allowed me to save for the first time in my life. Never had a nest egg or emergency fund until age 65.” To top it off, this commenter lives in Montana, where the cost of living is higher than average. He’s sure got the right idea.

To my surprise, it turns out I’m not alone in thinking a rainy-day fund is necessary during retirement. One source says retirees may need three-to-six months’ worth of expenses in reserve. If your income significantly exceeds your spending needs, you may be the exception. But to pay for an emergency, I’d rather not sell investments or spend dividends that are designated for reinvestment. Above all, I don’t want to carry a credit card balance—although I’m happy to get the reward points when I do charge. I just pay the card off in full each month.

I used to maintain at least $25,000 in emergency funds. After my recent unexpected expenses, however, I now think that sum is insufficient. After all, the water heater replacement has run down the fund. Replacing the air-conditioning unit may wipe it out entirely.

Begin retirement with an emergency fund in place, and plan your retirement spending to include monthly contributions to it. Somewhere down the line, that fund will come in handy—and lower your stress level.

Richard Quinn blogs at QuinnsCommentary.net. Before retiring in 2010, Dick was a compensation and benefits executive. Follow him on Twitter @QuinnsComments and check out his earlier articles.

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Still Time to Change

AH, RETIREMENT. You’re blissfully free of the daily grind. If you’ve made plans for this long-awaited milestone, great. What if you haven’t? You may feel out of sync and out of sorts.




I’ve heard it said that, “The capacity to take a fresh look at all things makes a young person out of an old person.” It’s never too late to look anew at the challenges of retirement, while you still have time to resolve them.




Finances. Today, it isn’t unusual to spend 25 or 30 years in retirement. Many retirees make the mistake of only planning a few years down the road. It’s difficult to predict what our financial needs will be in the decades to come. When we consider inflation, surging health care costs, rising taxes, Social Security policy changes, stock market downturns, house repairs and other unexpected disruptions, there’s no spreadsheet that covers it all. Still, plan we must, or we may reach our later retirement years in grim financial shape.




Purpose. Once retired, beware of being lulled into the couch potato syndrome. The less we do, the less we feel like doing. Lassitude becomes a lifestyle.




Retirement can be a time to delve into our creative side. Take up those guitar lessons you always wanted to try, or join a book discussion group. It may take a while to find your niche, but there’s no shortage of new hobbies to explore. You just have to get out there and “beat the bushes” to find them. Some retirees even convert their hobbies into a new career.




Socializing. It’s said that the happiest retirees are those with close ties to family and friends. But as we advance in age, we lose those closest to us. It takes time to meet new people and forge new friendships. We aren’t all outgoing and we can’t change into someone we’re not. While introverted tendencies may be innate, we should strive for flexibility. Conversely, extroverts may want to take it down a notch. Developing the art of engaging with others in a thoughtful way will likely prove to be a lifelong asset.






The 24/7 spouse. Even in the most compatible of marriages, you may find that irksome peccadilloes surface and forget the special qualities that originally attracted you to each other. Having a sense of humor helps to deflect small grievances. Being courteous and kind goes a long way toward understanding each other’s viewpoint, and can be a precursor to amenable compromise.




Family. This is a tricky one. Many people depend on their children or grandchildren to meet their emotional and social needs. These expectations may be disappointed. Your children likely have busy lives. They may not want to engage with you as often as you wish. Too much interaction can be viewed as interference. An open discussion about how to find a balance can lead to greater harmony. And it helps to have friends to share activities with, instead of relying too much on your children.




The “what if” and “if only” conundrums. Retirement is a time for reflection. But too much musing about the past and worrying about the future only lead to a morose mindset and regretful thinking. It prevents us from being all we can be in the present. The past is over. As the old saying goes, “Yesterday is history, tomorrow is a mystery and today is a gift. That’s why it’s called the present.”




A sound mind in a sound body. Our overall health overshadows everything we do. Fortunately, this is an area where we have some control. Exercise, eat lightly, cultivate cheerfulness, live moderately and maintain an interest in this fascinating world. Be continually grateful for all you’re still able to do and for everything you have.
Marjorie Kondrack loves music, dancing and the arts, and is a former amateur ice dancer accredited by the United States Figure Skating Association. In retirement, she worked for eight years as a tax preparer for the IRS’s VITA and TCE programs. Check out Marjorie's earlier articles.

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April’s Hits

WHAT CAUGHT THE EYE of HumbleDollar's readers over the past month? Here are the 10 most popular articles and blog posts that we published in April:

Medicare premium surcharges might seem modest compared to other costs incurred by retirees. But as John Yeigh notes, if you analyze the marginal cost, they may be the country's most punitive tax.
Want a say in how you depart this world? Kathy Wilhelm has taken all the necessary steps. But there's no guarantee her wishes will be respected.
"Can I afford this?" asks Adam Grossman. "If the answer to that question is 'yes' in virtually every case—or every reasonable case—it’s harder to know how to set boundaries."
"If I’m going to travel and see everything I want to see, I better do it now," writes Dennis Friedman. "Our 70s might be the last chance to travel without physical limitations."
Claiming Social Security? Don't rely on advice from Social Security Administration employees and instead do your own research. That's a lesson Marjorie Kondrack learned the hard way.
"Early returns have a modest impact," notes Philip Stein. "I wonder if people look at these early returns, conclude that compounding doesn’t work and then turn their attention to other investment strategies."
Thrift is worth a lot of money, yet it doesn’t cost a cent. Willful waste makes woeful want. Respect pennies and the dollars will respect you. Marjorie Kondrack reviews the money advice in a World War II booklet.
"In making a financial plan, it’s important not to dismiss any particular risk because it hasn’t happened recently," advises Adam Grossman. "Everything has some probability, even if it’s low."
A survey found 35% of millionaires agreed it would "take a miracle to achieve a secure retirement.” Would these folks worry less if they discovered the power to adapt when necessary, asks Rand Spero?
Larry Sayler has been driving his 2023 Toyota Highlander Hybrid for six weeks. He's still baffled by many of the bells and whistles—and he's not sure they're all that useful.

What about our twice weekly newsletters? The two most popular Wednesday newsletters were Ed Marsh's Getting Old and Matt C. White's When to Spend, while the two most popular Saturday newsletters were So Much to Like and Wishing My Life Away, both of which I wrote.

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Beyond Valuations

WHERE DOES THE STOCK market stand? After 2022’s decline, is it now fairly valued—or still overvalued?

When I think about questions like this, I’m reminded of an opinion piece written by Robert Shiller a few years back. By way of background, Shiller is a professor at Yale University and a Nobel Prize recipient. Along with a colleague, he created one of the more well-known and well-regarded measures of market valuation: the cyclically adjusted price-earnings ratio (CAPE).

Unlike a typical price-earnings ratio, which uses only short-term earnings numbers, the CAPE includes 10 years of historical data. Because of that, the CAPE ratio is viewed as a more accurate measure of market valuation. For that reason—and because Shiller has an above-average track record in making market forecasts—he’s seen as an informed voice on the stock market.

Still, even Shiller recognizes that there’s more than one way to look at the market’s valuation. Two years ago, in the midst of a market rally, Shiller made this statement: “The stock market is already quite expensive.” Then he added: “But it is also true that stock prices are fairly reasonable right now.” Why the seeming inconsistency? It depends on the yardstick, Shiller said.

At the time, in 2021, the market was indeed overvalued according to the CAPE ratio. But using a different measure he’d developed—the Excess CAPE Ratio—stock prices weren’t unreasonable. Shiller’s conclusion: Market valuation is a matter of perspective.

CAPE ratios are just two of the measures available to evaluate the market. In a recent article, The Wall Street Journal looked at several others and reached the same conclusion: It found challenges with each of them. Traditional price-earnings ratios, for example, can be biased when they’re based on Wall Street analysts’ expectations, which tend to be optimistic. They’re also susceptible to public companies’ accounting decisions, which can be creative at times.

Even Warren Buffett’s preferred measure—comparing the total value of the U.S. stock market to the total output of the economy (GDP)—has a weakness: More companies today are choosing to stay private, and that’s distorted the data.

Bottom line: Market valuation is, to a great degree, in the eye of the beholder. More important, none of these measures has terribly strong predictive powers. Look at CAPE readings through the 1990s, for example, and you’ll see that the market looked expensive for many years in a row, and yet it continued to rise. That made it an imperfect guide through that tricky period. Shiller himself acknowledges that, “I believe [the CAPE ratio] is an excellent tool for analyzing price levels, but its forecasting ability is limited.”

The good news: There’s an entirely different and, I think, more practical way to look at the stock market. I would instead rely on these four principles:

Avoid predictions. As Shiller himself says, it’s very difficult to forecast where the market is going in the short term. Valuation metrics are of little help. What we do know, however, is that periodic market downturns are inevitable. We just don’t know when they’ll happen. I suggest that investors avoid even attempting market predictions. Instead, to protect yourself from the market’s inevitable downturns, simply structure your portfolio so it’s prepared to weather a downturn whenever it arrives.

Consider submergence. How can you prepare your portfolio for a potential downturn? A recent paper titled “Submergence = Drawdown + Recovery” offers a helpful perspective. The authors use the term “submergence” as a measure of market downturns. It answers this question: When the market goes through a downturn, how long does it take to recover to its prior high-water mark?

This, in my view, is the critical factor, especially for those in retirement. If you’re taking withdrawals from your portfolio, a key pitfall is sequence-of-returns risk. If an investor is selling stocks while they’re underwater, it can jeopardize the longevity of that portfolio. For that reason, it’s important for investors to have a grasp of past submergences—their frequency, depth and duration.

What does history tell us? When the market dropped in early 2000, it took between five and six years to recover to its prior high. By the end of 2005, an investor would have been back to even. Similarly, when the market dropped in the fall of 2007, it continued to decline through 2008 and into early 2009. It then began a recovery, and an investor would have been back to even in a little less than five years—by the middle of 2012. In both episodes, the market dropped about 50%. In situations like that, it would have been critical to avoid selling stocks until the market had recovered.

The upshot: I recommend that retirees prepare their portfolios for a submergence of at least five years. What does that mean in terms of asset allocation? If you’re using the 4% rule for portfolio withdrawals, you would want to hold 20% (4% x five years) in conservative investments. I see that as a minimum. To be on the safe side, you might extend that to seven years, for three reasons: because a future submergence might be longer, because an unexpected expense might come up and simply for peace of mind.

Diversify. Diversification is the first rule of investing, but how can you use it to protect yourself from submergences? Normally, diversification is measured by looking at correlations between assets. If one asset zigs when another zags, they’re seen as good complements in a portfolio. The authors of the submergence paper point out, however, that correlation numbers can be misleading.

Consider indexes of short- and intermediate-term bonds. They each have very low correlations to stocks—between 0 and 0.3. By this measure, they both look like excellent diversifiers. But anyone who lived through 2022 now knows that a low correlation doesn’t mean no correlation. Last year, both stocks and bonds dropped, but intermediate-term bonds dropped far more than their short-term cousins.

The implication: To effectively protect your portfolio from multi-year submergences, it’s important to look not just at correlations but also at the behavior of each asset during past submergences. Based on the data, I see short-term bonds as the most effective way to offset the risk of a stock market submergence. Does that mean you should never own intermediate-term bonds? They’re okay. I’d just be sure they’re only a minority of your bonds.

If you’re buying. What if you’re in your working years and still adding to your portfolio? How should you think about submergences? I see this as much less of a concern. To be sure, the market could decline the day after you add new dollars to your account. But if you’re saving for the long term, and the dollars you invest today won’t be the only dollars you’ll ever invest, I wouldn’t worry too much about where the market stands today and what it might do in the short term.

Historically, the stock market has risen in about 75% of annual periods. If you’re investing a particularly large sum—more than, say, 5% of your net worth—you might employ dollar-cost averaging. Otherwise, I wouldn’t let any measure of stock market valuation hold you back from putting your investment dollars to work.

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 Twitter @AdamMGrossman and check out his earlier articles.

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My Good Fortune

I RETIRED ON MAY 27, 2022, which was my 55th birthday. I chose my birthday because it was the earliest date I could leave my job and still be eligible to receive the early retiree health-care benefit offered by my employer.

Mentally, I was ready to go. I’d been employed at a small liberal arts college for 24 years. I’d been there long enough to see an almost complete turnover of the faculty and staff in my department. I struggled to find purpose in my work. I felt out of touch with most of my coworkers. I had grown weary of various pandemic-related restrictions and protocols that had dominated campus life for more than two years.

Financially, I felt unsure about leaving behind my $75,000-a-year salary. I had been working fulltime since I was in my mid-20s. For 30 years, I’d been accustomed to getting a regular paycheck, paid time-off and a variety of other work-related benefits. I wasn’t sure how my husband and I would cope living solely on his retirement income.

A year later, I feel more comfortable with our financial situation.

On the day I left my job behind, I started a two-day road trip from Portland, Oregon, to Phoenix. My husband was already living in the home we’d purchased in a Phoenix suburb in 2019. The trip gave me plenty of time to contemplate how I was able to turn my dream of retiring at age 55 into reality. In the HumbleDollar book, My Money Journey, I describe the frugality that was necessary to retire at a relatively young age. But I also realize that luck—and timing—have played a significant role in my financial success.

I graduated without student debt. When I went to college in the late 1980s, it wasn’t difficult to graduate debt-free. By attending public colleges, earning scholarships and working part-time, I was able to get my bachelor’s degree without taking out any loans.

I was steadily employed for 30 years. I feel fortunate I made the choice to work in academia at a time when enrollment at higher education institutions was steadily increasing. Working at colleges and universities meant earning a modest salary. But it also meant never being subjected to lay-offs, downsizing or other staff reduction strategies.

I received generous benefits from my employers. While employed at my first job, I became vested in a lucrative pension. Two years after I quit, the pension benefits were significantly reduced. Being vested allowed me to keep my money in the original plan.

I had similar luck with my final employer. Five years after I started my college job, the retiree health-care benefit I’m now receiving was discontinued. I was still eligible to receive it by maintaining my fulltime work status for more than 20 years. Both my pension and health coverage are lifetime benefits, so they could help me financially for the next 30-plus years.

The real estate market has been good to me. All three of the homes I purchased during my working years appreciated while I was living in them. But it was the third home I owned that proved to me just how much luck and timing can positively affect a person’s financial success.

I bought my third home in 2018, shortly before getting remarried. I knew purchasing a house four years before I was hoping to retire was a gamble. It was possible I might not recoup my down payment—much less make a profit—by buying and selling in such a short time frame. To make matters worse, I was a buyer at a time when the market clearly favored sellers.

During the first 18 months my husband and I lived in the house, its estimated value didn’t change. Various online real estate websites suggested it would sell for the same or slightly less than the $375,000 I’d paid. I knew that, by the time a real-estate agent’s commission was subtracted, I could end up losing a fair amount of money when it came time to sell.

By late 2020, it was clear the property market was changing. Homes in our Portland suburb were selling within days of being listed. Prices seemed to be heading upward. For the first time, I believed there was a chance I’d break even when it came time to sell.

In September 2021, my mother sold her house. She lived less than a mile from my husband and me. My mom’s home was almost identical in size and style to ours. When the real estate agent suggested she list it for $500,000, I was skeptical. But when her house ended up selling for some $65,000 over the asking price, I became a believer. With my target retirement date of May 2022 in sight, I could only hope the housing market wouldn’t crash before I could take advantage.

In February 2022, my husband and I put our house on the market. Within 48 hours, we accepted an all-cash offer of $600,000. In addition, the buyer waived all of the inspections and allowed us to stay in the home rent-free until we needed to move out. Walking away with more than $250,000 in cash, just weeks before I retired, removed some of the anxiety I’d been feeling about leaving a regular paycheck behind.

My husband and I pulled the plug on a business opportunity in the nick of time. Shortly after moving to Arizona, we contemplated opening a dog training business. Both of us have been lifelong dog owners. We’ve trained our own dogs in a variety of sports. We thought it would be fun and profitable to open a dog training center in our community.

We found a small retail space that was available to lease. We started planning renovations, applying for permits and purchasing equipment. But when it came time to sign the lease, we balked. The terms would require us to make a 36-month commitment. We’d be responsible for much of the maintenance on the space. We calculated the overall cost of running the business for three years would be well over $100,000.

The day before we were set to sign the lease, we changed our business strategy. Rather than renting a space, we decided to offer in-home dog training lessons. We were able to get the business up and running for less than $2,500.

Forgoing that original business plan may be the single best financial decision I’ve ever been a part of. It’s clear my husband and I both overestimated the need and desire of people in our community for dog training. After almost a year of offering our services, we’re barely making a profit.

I’ll never know what my financial life would look like today if any one, or all, of the above life events had played out differently. Perhaps I’d be wealthy beyond my wildest dreams. Or maybe I’d be broke and forced to work for another decade or more. For now, I’m content with exactly what I have.

Kristine Hayes Nibler retired in 2022, and she and her husband now live in Arizona. She enjoys spending her time reading, writing and training their four dogs. Check out Kristine's earlier articles.

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Born to Sell

I ONCE DABBLED IN the world of sales. I wasn't very good at it. In 1997, I got a job at Schwan’s, driving one of those yellow trucks you see in neighborhoods all over the U.S. selling frozen treats, ice cream and a variety of food. I thought it would be a delivery and service job. But I found out during the orientation and training that there was an element of sales.

I read the books of motivational speaker Zig Ziglar in my free time and got some basic training in sales from the company. But as I began my route in the railroad town of Fort Madison, Iowa, I could see I needed help. A natural sales guy I was not.

At a party one weekend, I ran into my dad’s old friend, Pablo. My dad was godfather, or padrino, to Pablo’s youngest son. I was interested in talking to him because he was a successful car salesman.

As we talked about my struggles in sales, Pablo gave me a few tips. He also shared with me how he began his career. Pablo was from San Antonio. He spoke good English, but like many Hispanic men in my hometown of that era, he had a limited education. He dropped out of school in sixth grade to work because his family didn’t have a lot of money.

He met his wife when they were both working as migrant laborers, following the crops. My Midwestern town is home to a Heinz manufacturing plant where, in the old days, migrant workers picked tomatoes from the fields and transported them to the plant. After one season in the mid-1960s, Pablo and his wife never went back to Texas. Instead, they decided to make a home here in Iowa.

He met my dad at the retread factory, but he lost his job when he broke his leg. When he’d recovered, he landed a job as a janitor at the high school. Needing more money, he also worked as a janitor in the evening at the local Montgomery Ward store, where he was known as Paul.

One day, the store decided to have a sales contest to see who could sell the most bedsheets. They divided the store employees into three groups, with the sales staff getting to pick their team from all the store employees.

Though most of the traffic would be driven by the sales team, they wanted to include everyone in the contest. One manager suggested, as an afterthought, they include the janitors so they didn’t feel left out. Like the slow nerdy kid at dodgeball, Pablo was picked last.

He was eager to win the prize and began to tell the customers he saw walking in about these fabulous bedsheets they just had to have. He found out he had a natural talent and began closing many sales. He was spending just as much time spotting leads as he was cleaning the store.

It turned out that Pablo’s team won the contest. It wasn’t even close. Matter of fact, Pablo sold more bedsheets by himself than the rest of the store combined.

The next day, after the contest was over, Pablo was pushing his broom, sweeping the floor as he always did. The store manager came up to him and suggested he put his broom down. He gave him a necktie and a job offer. “Paul, we think your skills would be better served selling.”

That humble beginning was the start of his sales career. Pablo eventually got a job as a car salesman in my hometown and consistently grossed six figures for more than 30 years.

He put his sons through college, and one even became a school principal. When my dad bought a car, he always went to his “compadre Pablo.” I went with my dad once as he bought a small, ugly used Dodge Omni for my older brother. I had the privilege of driving the same car when I turned 16.

You couldn’t see the wall in Pablo’s office for all the sales awards he’d won. I’m sure it helped that he was one of the few salesmen at that time who spoke Spanish. Ultimately, however, Pablo was just a fantastic salesman. He won sales contests that provided family vacations, the latest televisions and appliances, and he drove the dealership’s best demo car for free.

At different times, he owned a theatre that played Spanish movies in the Quad Cities and a Mexican restaurant. He was also a landlord—all while working six days a week selling cars. When I saw him last week, enjoying his retirement, I asked him if he ever regretted working so hard all those years.

Typical of his generation and background, he told me he never worked hard. He had seen migrant workers in the fields picking crops. That was hard work, he said. He made a sale, handed the ticket to the office, and his work was done. The hours were long, yes, but it never felt like hard work to him. Not bad for a Mexican-American kid with a sixth-grade education from a barrio in San Antonio.

My sales career ended after six months. The long hours working my route were getting to me, so I put in my notice. I wasn’t making great money and, with my sales skills lacking, I didn’t see that changing anytime soon. I got a temp job that eventually led me to a position at the plant where I work today. It was a great move for me.

I did develop an appreciation for the sales industry, though. The profession isn’t always given the respect it deserves. Every company relies on sales, and it’s a job that provides opportunity for those with sales talent, skills and drive.

Your education, grades and background don’t matter in sales. What drives your career and salary is your results, and my dad’s friend Pablo is a great example of that. “Only in America,” as Don King would say.

Juan Fourneau’s goal is to retire at age 55. When he isn't at his manufacturing job, he enjoys reading and writing about personal finance, investing and other interests. Juan, who is married with two children, retired from the ring after wrestling on the independent circuit for more than 25 years. He wrestled as a Mexican Luchador under the name Latin Thunder . Follow Juan on Twitter @LatinThunder1, visit his website and check out his previous articles.

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A Prize Inside

A LONG TIME AGO, when I bought gas for my car, the attendant gave me a miniature jar of grape jelly. In fact, every time I’d fill up, I’d receive a little jar of jelly or a juice glass—back in 1964.

If I didn’t get jelly, I’d get a faux tiger's tail, which I dangled from my gas tank. When that tiger tail was stolen, I hung its replacement from my rearview mirror. Yes, those were the days when you were encouraged to buy gasoline. I wonder whether there’ll be incentives while you’re waiting for your electric vehicle to charge?

I opened a box of Cheerios this morning and had a flashback. Where’s my prize? My favorite cereal-box prize as a child was the little plastic submarine powered by baking soda. I’d put it in the sink, and it sunk and then rose to the top. There were toy frogmen that did the same.

In my youth, boxes of cereal contained small rockets and mini-Frisbees—even a pistol. That last one was printed on the box. You cut it out, along with assorted miniature cars and characters. We collected them all.

Even better were the miniature metal license plates packed inside our Wheaties cereal boxes back in the 1950s. You collected them or put them on your bike. No chance of getting all 50 states, though. There were only 48 states back then. I was never allowed to have a two-wheeler and I was embarrassed to put one on my tricycle. I just collected them. You can find them on eBay these days.

These amazing gifts were not limited to cereal. On occasion, Wonder Bread gave away miniature loaves of bread at our local A&P supermarket. We’d take them home and make ourselves two-inch square peanut butter and jelly sandwiches. Quite satisfying, if not exactly filling.

And who can forget Cracker Jack prizes? There used to be charms and miniature figures made from celluloid. Before that, Cracker Jack boxes contained baseball cards and tin whistles. In the 1970s, you could get a miniature pinball game.

The possibility of a kid popping one of these prizes in his mouth led to worries about choking. Pretty soon, the prizes were reduced to pieces of cardboard. Today, the Cracker Jack “prize” leads you to the internet.

My favorite Cracker Jack prize was the real deal, a tattoo. Who can forget licking your arm and pasting on a temporary tattoo? Very cool indeed—until the “temporary” took a lot of scrubbing to remove after your mother spotted it.

The prizes we sought as kids didn’t always arrive inside a cereal box. Many times, I sent away for the prize by mail, perhaps earning it by enclosing box tops. There was an Ovaltine decoder ring to reveal a secret message—though mine actually was a pin, not a ring.

Yes, those were the days. People who wanted us to buy stuff gave us junk. It’s no different today, just more subtle and less fun. Now the trend is an access code. Scan it off a box and wonderful things appear on your phone or tablet, but nothing to collect in your junk drawer.

Let’s not forget that adults were marketing targets, too. I can still taste the glue from licking hundreds of Green Stamps to be pasted in a book to redeem at its retail store. My mother was obsessed with collecting them. I was in big trouble if I forgot to collect my stamps after a purchase at the store.

Today, I count my Starbucks points as I work toward a free $6 latte. And my airline miles—accumulated with credit card spending—earned me first-class tickets to South America three years ago. I also buy my golfing supplies with American Express points that I spend on Amazon.

Without all this creative marketing, the price of many products might be lower. But who can resist the allure of “free” stuff?

Richard Quinn blogs at QuinnsCommentary.net. Before retiring in 2010, Dick was a compensation and benefits executive. Follow him on Twitter @QuinnsComments and check out his earlier articles.

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Generic Advice

AS A FAMILY MEDICINE physician associate, I frequently meet with patients early in the new year who are upset. The reason: They just learned their medications are no longer covered by their insurance or will cost significantly more than before. Many times, the insurance company will send them a letter providing other options to consider. I work with patients to find a generic substitute that isn’t as costly.

Several years ago, I had an elderly gentleman in our office one morning complaining that he was having difficulty urinating. This had been going on for a couple of weeks. While we were talking, I reviewed his medications and noticed that he had tamsulosin on the list. It’s used to treat an enlarged prostate.

I asked the gentleman if he’d been taking the tamsulosin. He said he quit taking it about three weeks before the onset of his symptoms. When I asked why, he told me that the refill was going to cost more than $200 at his retail pharmacy.

While we were talking, I looked up the cost of tamsulosin on GoodRx.com, the discount pharmacy site. I saw that the cash price for this medication at a grocery store pharmacy was $9.99 for 30 days.

The gentleman said $9.99 a month would work for him, so I printed the GoodRx.com coupon and gave it to him. Not all of my elderly patients are well-versed in using the internet or smartphone apps. They don’t know how to research the lowest-cost medications, so I frequently do the research for them and provide them with discount coupons for their prescriptions.

This encounter, and many others over the years, make me wonder why everything related to prescriptions and health care has to be so complicated. While there are many factors involved, a major one is the lack of price transparency by hospitals, pharmacies and insurance companies. It’s hard to comparison shop when drug prices are difficult to find or even unlisted.

Many patients are loyal to a certain major retail pharmacy that they’ve used for years. Unfortunately, when pricing drugs, many retail pharmacies charge a hefty premium for generic medications. Often, pharmacies can obtain a common generic for pennies, but then mark it up as they see fit. They usually aren’t able to do this as much with newer, branded medications.

Walmart came out with its $4 generic drug list a few years ago. That approach has since been mimicked by other pharmacies. With a few exceptions, the cost of many medications runs $4 for 30 days and $10 for a 90-day supply. Many patients are unaware that Walmart offers low-cost generics. In another significant savings, Medicare now pays for more commonly recommended vaccinations.

Many other drugs can be prohibitively expensive. Frequently, Medicare diabetic patients are on new, once-a-week injectable medications that cost $700 for three months. Patients with chronic obstructive pulmonary disease can be on inhalers that cost more than $400 a month.

Despite all of the creative advertising by pharmaceutical companies offering a discount card or coupon for many new medications, the majority of patients on Medicare don’t qualify. These advertised discounts only apply to patients with commercial insurance.

Adding to costs, many Medicare drug plans also have a coverage gap commonly referred to as the donut hole. In 2023, the donut hole begins after you and your drug plan have spent $4,660 on covered drugs and lasts until the cost of your prescription drugs reaches $7,400. While in the donut hole, a person will pay up to 25% of the retail price of a brand-name drug or generic drug.

Several years ago, I learned that pharmaceutical representatives can track the number of prescriptions that we write as health-care providers. Generally, they’re not very happy with me because I don’t prescribe many branded medications.

I try to use generics as much as possible. My goal is to be an advocate for the patient and not the pharmaceutical company. I prescribe medicines that I think are best for their health and their pocketbook.

I also educate patients to be aware of the difference between a drug being “covered” versus “paid for” by their insurance. Just because a medicine, procedure, lab test or vaccination may be covered doesn’t mean that it’s paid for in full.

Too often patients call our office upset after a lab test or vaccination because it wasn’t completely paid for by their insurance and they’ve received a surprise bill for, say, $200. I recommend that patients call their insurance company or pharmacy to find out the out-of-pocket cost before having anything done in a non-emergency medical setting.

Schaeffer Center researchers recently detailed that federal government and Medicare beneficiaries are overpaying for generic prescription medications. They determined that, “Medicare Part D stand-alone plans paid $2.6 billion more in 2018 for 184 common generic medications compared with prices for the same drugs available to cash-paying Costco members.”

Who benefits from the dysfunction of the health-care system? Among the big winners are the health insurance companies. This brings me to a topic that may raise your blood pressure: the compensation of health insurance CEOs. The chief executives of seven of the largest U.S. health insurance companies collectively earned more than $283 million in 2021.

It’s important to work with your health-care provider to receive the most appropriate medicine for your health needs without unnecessary cost. Be sure to ask if there’s a generic alternative to a branded medication that you’re prescribed. Then ask for the cash price at the pharmacy and compare that with the cost under your insurance plan.

Happily, there’s increasing competition in the prescription market, which can lead to lower prices. Providers getting into the generic medicine market include Amazon Pharmacy, Blueberry Pharmacy and CostPlus Drug Company. I hope such efforts will bring more transparency to all aspects of health care.

Scott Martin is a semi-retired family medicine physician associate (previously known as a physician assistant) and has been practicing medicine for the past 18 years. His previous career was in academia doing research and teaching at the University of Georgia. He and his wife enjoy traveling and spending time with family. Scott's previous articles were On My Shoulders and Too Trusting.

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