Jonathan Clements's Blog, page 5
August 25, 2025
2024 Update to the OASDI Beneficiaries by State and County
Almost four years ago I wrote an article about the 2020 OASDI Beneficiaries by State and County report. The report is put out by the Social Security Administration (SSA), and provides a wealth of interesting statistics. Here is the link to the 2024 report where you can investigate detailed national and local data.
Here are some basic numbers for context. As of December 2020, the U.S. population was 329,484,123. Four year later it had grown 3.5%, to 341,145,670. About 20% of the population receives some form of benefit. The population age 65 or older grew by 9.9%, to almost 18% of the population. The number of people receiving retirement benefits grew by a slightly less amount of 7.1%. The table below provides some data indicating the change over the last four years. It’s not surprising that our population is trending older.
Item 2020 2024 Increase
US Population 329,484,123 341,145,670 3.5%
Population 65 or older 55,659,365 61,179,918 9.9%
Receiving Benefits 64,850,867 68,455,973 5.6%
Retirement Benefits 48,329,595 51,772,651 7.1%
Survivor Benefits 5,874,648 5,785,602 -1.5%
Disability Benefits 8,151,016 7,231,147 -11.3%
West Virginia still has the largest population receiving benefits at 27.1% of the population. After that come Maine, Vermont, New Hampshire, and South Carolina. Utah claimed the prize this time as the state with the lowest portion of the population receiving benefits, at 13.5%. The report provides county by county data for the 50 states, US territories, and US citizens living abroad. My favorites statistic is there are 360 people receiving benefits whose whereabouts are unknown.
Four years ago, I concluded the article by expressing hope that Congress would eventually make changes to shore up Social Security—because politicians wouldn’t want to risk the wrath of their constituents who are most likely (seniors) to vote. Almost four years later I still have hope, but it’s waning.
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August 24, 2025
Humble 10% Win: The First Financial Benefit of Retirement
I've just encountered the first positive financial benefit of officially being retired from the workforce. My car insurance renewal notice appeared in my inbox, and being the person I am, I contacted the insurance company to inform them of my change in circumstances from employed to retired.
What's particularly noteworthy for those of us just starting retirement is to remember to contact your insurer. Many people might just pay the renewal notice without thinking about updating their information. A simple phone call led to a 10% saving. This shows the importance of staying on top of your finances and actively communicating with service providers about any life changes.
A 10% saving is a nice little win for a phone call, and as the saying goes, every little bit helps. Now I have a bigger problem, what am I going to spend that $40 on???
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1031 exchange
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Frugality, Minimalism, and Aligning Values
I’ve always been a minimalist – even as a teenager I had no interest in having lots of clothes, shoes, or other trappings of high school life in the 80s. That pull toward minimalism was reinforced during the 2 years I spent teaching English in Japan after college. No dedicated bedroom that sits empty and unused all day? My bed folds up and is stored in the closet? A tiny fridge forcing me to buy fresh fruit and vegetables every other day? Fantastic public transportation so I didn’t need to own a car? I was in heaven.
I’ve read with interest recent articles and comments about frugality – what it means to be frugal, examples of frugality, and what motivates people to adopt a frugal lifestyle. It got me thinking about my own spending habits, and their intersection with my minimalist lifestyle. I realized that while I certainly fit the definition of frugal, my spending, or lack thereof, is not motivated by a drive to save money. Rather, it’s closely tied to my desire to tread lightly through the world; I want to minimize my footprint (i.e. reduce how much of the world’s resources I appropriate for my use) and not be weighed down by ‘stuff’.
For me, minimizing my footprint means embracing habits like buying items used when possible, putting on sweaters when it’s cold, rather than cranking the thermostat, and taking public transportation when possible (sadly, that’s not too often in this country). While those habits save me money, other footprint-minimizing habits, like buying local and avoiding Amazon, Target, Walmart, and other big box stores, do not.
Not owning much ‘stuff’ checks both boxes: it reduces my footprint and doesn’t weigh me down with things I don’t need. I love the freedom this brings me. My partner and I left the Bay Area a few years ago and have been semi-nomadic ever since. Everything we own in the world fits comfortably in a 5x5 storage unit (that was the smallest size available) – I think of it as renting a closet! When we travel, we each bring a 22L day pack as our luggage, and even on a 3-month trip to Europe, we had room to spare.
I love that the concepts of frugality and minimalism both encourage a person to be thoughtful and intentional about how they are living. So many of the messages we are bombarded with daily are about consumption of ‘stuff’ that advertisers convince us we can’t live without. I think Wordsworth had it right when he said. “The world is too much with us; late and soon, / Getting and spending, we lay waste our powers;”.
I know from reading this forum over the past few years that in answering the question of how best to spend our time and resources, we’d all come up with wildly different answers; there’s a reason Baskin-Robbins has 31 flavors of ice cream! The beauty of taking the time to reflect and to make conscious choices, is that we can be more confident that our spending – of time and energy, not just money! – aligns with our values.
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August 23, 2025
The Main Thing … and the scourge of complexity
Like many HD readers, I really enjoy the writing of Morgan Housel. He recently wrote
“You should obsess over risks that do permanent damage and care little about risks that do temporary harm, but the opposite is more common.”
This tapped into a train of thought that I’ve been on recently – focussing on the important stuff. Or, as on old boss of mine use to say, “The main thing, is that the main thing, is the main thing”.
We live in a messy, complex world.
When I use my web browser, it lists a multitude of news stories that are all jostling to be seen as the most urgent, critical, vital. When I check on my favourite finance blogs, there is lots of expert analysis and advice. The links from these blogs also have lots more analysis and advice. Often this is consistent, sometimes it isn’t.
Most importantly, this torrent of news and advice is so often focused on minutia.
• Choosing one particular type of account rather than another because of a tax advantage.
• How to find “optimisation” in your asset allocation – how often should I rebalance, how should asset allocations change with age etc.
• How to maximise your credit score.
• What will happen to various investment options in the next day, week, month or year.
It seems to me that pursuing these many and various personal finance quests probably does two things – leads to mental exhaustion, and has little impact on reaching a comfortable financial life.
I have come to the view that as human beings we are likely better off keeping a very short list of important things that we devote our time and effort to.
With absolutely no claim for these to be correct, I’ll offer some of mine.
In business:
- Keep our staff happy and safe
- Focus on our customers and their satisfaction
- Focus on the big items of revenue and expense, rather than “nickel and dime” items.
For our personal finances:
- Be sufficiently frugal so there is always something left over
- Put every single dollar to work – either paying down debt or invested into simple, low cost funds
- Stay committed to the long term, ignoring any short term oscillations
This approach has served us well. Our priorities won’t be for everyone, and I’m certainly not smart enough or qualified enough to offer them as advice to anyone else.
But I am firmly convinced that simple is better than complex.
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Online Banks
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Love, Money, and a 44-Year Compromise
A strong partnership where both people work can also supercharge wealth generation through the decades, especially if you both think in lockstep on humble lifestyle choices and the importance of saving for the future.
But it has to be said that everyone has different risk tolerance, even within a close relationship and that can translate into the financially optimal" choice not always being the right choice when you're part of a partnership.
I think it's refreshing to openly discuss how relationship dynamics factor into major financial decisions, rather than pretending it's all just about the numbers. So much financial advice is presented in a cold, analytical way that ignores the emotional and interpersonal factors that are often the most difficult to navigate.
I can think of many examples of disagreement about financial risk issues between Suzie and myself. One recent road bump was Suzie wishing to pay off a low rate mortgage and my wish to keep the debt and earn higher returns in the market. The compromise was easy…Suzie's need for security was much stronger than my desire for possible higher returns.
Suzie has more of a tendency to hold cash in high-interest savings accounts, whereas I prefer to hold less cash and more in stocks. The simple solution was to run two separate portfolios. Maybe it's just joint mental accounting, but it satisfies both our needs without jeopardizing our lifestyle, and it strengthens our emotional relationship.
This optimization for emotional and relationship return over financial return can be difficult at times and requires emotional maturity and a clear understanding of your financial situation. It's maybe a strange paradox but a suboptimal financial choice is sometimes an overall correct choice within a strong relationship and should be considered within any overall financial plan.
For couples navigating these waters, I'd suggest starting with honest conversations about your individual relationships with money and risk. What keeps you up at night? What gives you peace of mind? Then look for creative solutions that honor both perspectives rather than forcing one person to simply give in.
After 44 years together, I've learned that the most important financial asset isn't in any portfolio—it's the partnership itself. A relationship strong enough to weather market crashes, job losses, and life's inevitable curveballs is worth more than any optimization strategy. Sometimes the best financial plan isn't the one that maximizes returns—it's the one both partners can live with comfortably for decades.
When financial advisors talk about diversification, maybe they should include relationship harmony as an asset class worth protecting.
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On the Downslope of Life?
I’VE ALWAYS BEEN a saver. From my first job singing in the church choir, I stashed earnings in a snap-top Band-Aid box. I added to my savings by sweeping the patio of a family friend.
Sometimes, I’d shake my savings onto my bedspread and count it. It gave me a great feeling to find that I had $10.50 or $15.65. The stacks of silver quarters gave me a sense of security as a child.
That’s why it’s been a bit of a letdown to start withdrawals from my 401(k). No, they’re not required. Required distributions don’t kick in for me for four more years. No, the reason to automate monthly withdrawals is simple. Five years into retirement, I can see the bottom of my liquid savings.
I'm lucky, however. With the U.S. stock market at new heights, my assets have grown slightly in retirement, not shrunk. If I don’t spend money, some of it might evaporate in a correction.
But subtracting from my 401(k) feels like I’m entering the downslope of life. Franco Modigliani won the Nobel Prize for his life cycle hypothesis of human consumption. When we are vigorous and young, we save money for old age. When we are retired—and presumably tired—we withdraw the money to live without labor.
This transition to withdrawals is not easy for lifelong savers like me. You may have experienced it, too. Spending money can feel irresponsible. I’ve worked hard to postpone consumption, unless the money was for someone else.
This summer, for example, I tried to coax one more year out of an old Electrolux, which only started intermittently. I’ve got old sheets, old books, an old house, and an old boat that requires daily bailing.
Being a thrifty Yankee is a time-honored role here in Maine. If I’m honest with myself, however, I realize that maintaining all these geriatric possessions is getting in my way. I don’t work as hard at everyday chores as I have, and some jobs are beyond my skills. Thoughts of deferred maintenance keeps me up at night.
I’m going to change. I started with a small step today. I threw away the old Electrolux. I could have taken it to the repairman again, but honestly, it’s a relief to be rid of the old contraption. I want to spend more time on the water, not in the shop.
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Dividends Part II – At least
https://www.whitecoatinvestor.com/div...
Today, I’m going to channel my inner “RDQ” and raise some peoples ire:
About one month ago, there was a post about dividends. It contained quite a bit of what I will politely call, “magical thinking”. Despite my linking two excellent articles which debunk the dividend myth, clearly subsequent posters did not bother to read either of them and persisted in posting the dividend dogma that commonly persists. I even resorted to asking Jonathan to chime in (which he kindly did) as too many folks seemed to still not be “getting it”, to my dismay.
In an effort to never give up the good fight (LOL), a new post dropped this morning elsewhere, and I have attached the link above, in an effort once again at dispelling the false ideas people have about dividends.
Please feel free to use your down arrow votes aggressively and make my day !
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August 22, 2025
How to Beat the Market
Hedge fund manager Seth Klarman is a modern-day Carnegie. Klarman founded the Boston-based Baupost Group in 1982, and while performance numbers aren’t publicly available, the firm’s track record is believed to be among the best in the industry. By some accounts, returns have averaged 20% per year, roughly double the overall market’s returns.
Like Carnegie, Klarman’s approach is so specialized and so unique that he’s happy to tell people how he does it. He regularly gives interviews and even wrote a book detailing the different ways Baupost makes money.
While this approach isn’t appropriate for everyday investors, these strategies—known as deep-value—are so different from what’s popular on Wall Street that they’re worth understanding.
Klarman’s philosophy rests on several key pillars, the first of which is that he avoids making forecasts. He jokes that he’d “predict ten of the next two recessions,” and as a result, doesn’t find that a useful basis for making investments. This is a particularly important point because active management often involves forecasting. Klarman’s view, though, is that it’s too unreliable and thus the wrong approach.
Other successful investors share this view. Peter Lynch, the retired manager of Fidelity’s Magellan Fund, called forecasting “futile” and argued that “crystal ball stuff doesn't work.” Lynch was especially wary of economic forecasts. “If you spend 13 minutes a year on economics, you've wasted 10 minutes,” he once commented. Instead, Lynch would go company by company, looking for stocks that, in his estimation, were selling for less than they were worth.
Warren Buffett has expressed largely the same view. “What you really want to do in investments is figure out what is important and knowable,” he’s said. And while the future direction of the economy is important, it isn’t knowable. For that reason, Buffett says, investors should avoid making forecasts and should avoid listening to others’ predictions.
If forecasting isn’t part of the value investors’ toolkit, then how do they choose investments? In short, they search for things selling at such steep discounts that a crystal ball isn’t necessary. But because these sorts of opportunities are rare, they’re often looking far off the beaten path. Obvious investments—even if they look like good investments—don’t appeal to value investors. Baupost doesn’t own Apple, Amazon or Microsoft. This approach, in other words, is the opposite of what Wall Street tends to promote.
To illustrate how Baupost operates, Klarman describes an early investment. When he was a teenager, he worked out an arrangement with a local bus driver to secure rare coins. At the end of each day, the driver would go through the bus’s coin box, and when he found an out-of-circulation coin like a Mercury dime, the driver would give it to Klarman in exchange for a regular coin. In other words, Klarman would pay 10 cents for something worth far more than 10 cents somewhere else. In finance, this is known as arbitrage, and it’s among the strategies that hedge funds like Baupost use.
In his book, Margin of Safety , Klarman describes some of the other unusual investments favored by value managers. These include corporate spinoffs, bankruptcies, thrift bank conversions, rights offerings and other complex securities.
If these sound complicated, that’s the idea. These investments tend to be profitable because they’re so arcane. Consider spinoffs. Why do they present opportunity? Margin of Safety explains that individual shareholders receiving spun-off shares will often sell reflexively because “they may know little or nothing about the business,” and institutional investors “may deem the newly created entity too small to bother with.” For these reasons, newly spun off shares tend to trade at depressed prices, providing opportunity for value investors willing to go against the grain.
In one sense, the types of investments Klarman pursues are straightforward. Value investors like to say that they’re simply looking to buy a dollar for 50 cents. It’s really no more complicated than that.
Hedge fund manager Joel Greenblatt ran a firm called Gotham Capital that pursued many of the same strategies as Baupost, and with similar results. Over one 10-year period, Gotham averaged 50% annual returns, a remarkable feat. And just like Klarman, Greenblatt wrote a book detailing exactly how he did it. It’s called You Can Be a Stock Market Genius. What’s telling, however, is how few people choose to follow their lead. That’s because deep-value investing like this requires more than just a playbook; it requires a commitment of time and patience, it involves significant legwork, and perhaps most important, it requires the mental fortitude to intentionally go against the crowd.
What can individual investors learn from these strategies? Just as with Carnegie’s steel mill, funds like Baupost and Gotham are a marvel. Their complexity, though, tells us something important: It illustrates just how difficult it is to beat the market. This type of investing entails significant effort and enormous cost. To run his fund, Klarman employs 250 analysts. To reliably beat the market, that’s what’s required. And even then, it doesn’t always work. According to the data, the majority of actively-managed funds underperform each year. Recent reports indicate that even Baupost has been struggling of late.
That’s why, at the risk of sounding like a broken record, I always recommend index funds. To be sure, they aren’t designed to beat the market. But by avoiding counterproductive strategies like forecasting and tactical trading, index funds are designed to do something else critically important: They’re designed to help investors avoid underperforming.
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 @AdamMGrossman and check out his earlier articles.The post How to Beat the Market appeared first on HumbleDollar.
