Jonathan Clements's Blog, page 89

Against the Odds

MARCH MADNESS HAS descended on my family. I’m not just referring to the hoopla surrounding the annual NCAA college basketball tournament that runs from late March through early April. I mean the reckoning for our 36-year-old son, and his decision to switch careers and pursue his dream of becoming a professional sports bettor.   

For the 10 years after college graduation, Ryan taught high school math and coached basketball. But in between planning lectures, going over homework and grading exams, he was cultivating a very different kind of pastime. After achieving some success while working what was in essence a job and a half, he felt ready to break the tie to his secure teaching job and venture full-time into an occupation that promised turbulence, more money and self-fulfillment.

Skeptical and concerned, but with faith in our son’s judgment, my wife Alberta and I agreed to support Ryan, chipping in some start-up money for two years. You may see us as pathetically manipulable. You can call us dangerous and shameful enablers. You might even think Alberta and I should be surrendering our psychology licenses. But we want our son to have a shot at a career that’s meaningful to him. If many of his friends and those in our professional circle are contemptuous, so be it.

What in a nutshell does sports betting entail? The demands are daunting: 60-hour weeks for sure, including much of the weekend. Ryan bets on baseball, along with college and pro football and basketball. The Monday-through-Friday stretch requires intricate probability research to gain an edge over the house.

Fridays during basketball season are particularly frenzied, as Saturdays are host to more than 100 college games. Sprinkled into the routine are online conversations searching for clues from fellow bettors, along with the occasional call to a local sportswriter for the latest news on the status of an injured star player.

Besides their prodigious work ethic, sports bettors must tolerate agonizingly close games and days of harrowing losses. The strategy Ryan uses to reduce those losses will be familiar to you. On each betting day, Ryan becomes the manager of a “fund” of small wagers across many games. Remember, the goal is a relatively stable income stream, not to risk everything on red.

The toll on the sports bettor’s health is physical as well as psychological. The stock market can be a wild beast, but at least we know when it’ll open for trading. Incredibly and probably deliberately, the betting lines can come out at any time during the day or night. If you want to try and anticipate opening prices, get ready for some interrupted sleep.

Social life is put on hold. The Friday and Saturday crunch crimps friendships and dating life. A confirmed introvert, Ryan’s network is small and he often feels isolated. Weekend events like weddings and bar mitzvahs become obstacles more than celebrations.

Can flowers bloom in a desert of drudgery, unpredictability and aloneness? Ryan loves his daily routine—the numbers, the multiple TV screens, the sports memorabilia on the wall, time in a coffee shop with his laptop. He relishes his freedom from the clutches of the eight-to-five job and the chance to live out his passion, something most people never get. The pattern of Ryan’s results has been the same over each of the two years. He’s sustained small losses in baseball and football, and made very large profits in both college and pro basketball, where he can capitalize on his coaching experience. Last year, he enjoyed fabulous success, not only overcoming the small losses but also allowing him to adopt a privileged lifestyle.

This year, Ryan has again beaten the odds, but only back to the level of his earlier humdrum teacher’s salary. What was only a worry has become a reality: His income would be highly volatile from year to year and so would his lifestyle. More so, that bountiful first year may just have been a random outlier unlikely to be repeated. Business deductions are sweet, but no health care, no employer retirement contributions and no summer off? Are the goodies really worth the brutal time commitment and compressed weekends?

Maybe it’s time for a part-time job, which many of his compatriots use to smooth out income and provide fringe benefits. A part-year position in the burgeoning sports betting community would be ideal, and might induce Ryan to shed the unproductive sports and concentrate on his specialty. The reckoning has arrived and, barring an unlikely romp through the tournament, the family will need to call a timeout and huddle.

The three of us, already a tight bunch, have become even closer. At a time when many parents are struggling to forge a conflict-free relationship with their adult children, Alberta and I are on the phone with Ryan almost daily. She catches up on the day-to-day drama of her son’s life and I get the scorecard.

Now, let’s cut to the chase. Is my son a gambling addict whose affliction is merely papered over by a hot streak? Maybe so. Could he find his way out should the profits prove fleeting or his health declines? Confronting these questions needs to be part of the game plan.

More than 50 years ago, I sought a career that would free me from the doldrums of everyday job constraints. I imagined I was destined to be a whirlwind options trader, running to payphones for real-time quotes. Fortunately, I failed early and often enough, and met a woman who could lead me back to the world of work reality.

But I am haunted by the “what if”? Could my support of Ryan’s unorthodox career choice reflect an attempt to compensate for my failure as a free-wheeling options trader? This is reason enough for another kind of huddle—one where the players are the different parts of myself.

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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Totally Your Choice

LET'S START WITH a contention that’ll get nods of agreement from the vast majority of HumbleDollar readers: Your portfolio’s core holdings should be total market index funds.

But which funds?

Frankly, the differences among the most popular total market index funds are modest and perhaps not worth worrying about. Still, worry we do. As I see it, which ones you choose depend on what you’re most focused on. Here are four key considerations:

Low cost. If your goal is the lowest-possible fund expenses, the place to head is Fidelity Investments, which offers a total U.S. stock market fund (symbol: FZROX) and a total international stock fund (FZILX) with zero expenses. If you’re looking to build the classic three-fund portfolio, you’d probably want to add Fidelity U.S. Bond Index Fund (FXNAX), which charges a tiny 0.025% in annual expenses, equal to 2½ cents a year for every $100 invested.

But while the resulting portfolio’s overall fund expenses would be tiny, there’s a price to be paid. You’d hold these mutual funds at Fidelity, and that means you’d likely use a Fidelity money market fund for your cash holdings. Indeed, these cash accounts have become the big profit center that allows brokerage firms to offer not just loss-leader index funds with minimal expenses, but also commission-free stock trades.

In the case of Fidelity, its Government Money Market Fund (SPAXX) charges expenses of 0.42%, versus 0.11% for Vanguard Group’s default money market fund, Vanguard Federal Money Market Fund (VMFXX). Typically hold a lot of cash in your brokerage account? Fidelity’s zero-cost index funds could prove mighty expensive.

Simplicity. While I’d like to pay the lowest possible cost, my preference these days is simplicity, which includes holding the fewest funds possible. That’s why my biggest stock-fund holding is Vanguard Total World Stock Index Fund.

The fund is available as both a mutual fund (VTWAX) and an exchange-traded index fund (VT). I own both, using the exchange-traded fund (ETF) for money I plan to bequeath and the mutual fund for holdings I may sell in the years ahead. Unlike the ETF, the mutual fund can be bought and sold without incurring trading costs.

As I see it, Vanguard Total World Stock is the ultimate in stock market diversification, a fund that I should never have reason to sell except to raise cash or rebalance my portfolio. As an alternative, you might consider SPDR Portfolio MSCI Global Stock Market ETF (SPGM), which has similar expenses.

While I’m a fan of total market index funds, I don’t own a total bond market index fund. I prefer to take less risk with my bonds and compensate with a larger allocation to stocks. What do I do for bonds? I aim to split my bond-market money between a conventional short-term government fund (VSGDX) and a short-term inflation-indexed Treasury fund (VTAPX).

Tax efficiency. I own Vanguard Total World Stock in various retirement accounts. But the fund has a drawback for taxable-account investors: Shareholders aren’t currently eligible for the foreign-tax credit because the fund has less than half its assets in foreign stocks.

Are you investing through a taxable account? As you build your portfolio, you’ll not only want to own separate total U.S. and total international stock funds, so you can collect the foreign tax credit, but also you’ll want to favor ETFs over index mutual funds.

Because of the way they operate, ETFs should be able to minimize capital-gains distributions and likely avoid them entirely. By contrast, stock-index mutual funds are a little more likely to distribute capital gains. An exception: Vanguard’s index-mutual funds have had an advantage for the past two decades, thanks to a special tax technique. That technique is now off patent and available for other fund companies to use.

Another important step for all investors, and not just those who are especially focused on taxes: You’ll want to keep your total bond market fund—or any taxable-bond fund you own, for that matter—in a retirement account, so you don’t have to pay tax each year on the fund’s income distributions. What if you have a sudden need for cash and all your bonds are in a retirement account, so you’re facing a possible 10% tax penalty on early withdrawals? Check out the strategy described here.

Flexibility. In addition to superior tax efficiency, ETFs offer investors added flexibility—in three ways. First, you can buy and sell them throughout the trading day, rather than waiting for the 4 p.m. market close, as happens with regular mutual funds. I see this more as a temptation to trade than an advantage, but I know others see things differently.

Second, you can purchase ETFs through any brokerage account, which isn’t always the case with mutual funds, where the cheapest—and sometimes the only—way to purchase them is directly from the fund company involved. In other words, you can own ETFs at the brokerage firm of your choosing, and you can move your holdings from one brokerage firm to another.

Finally, with so many different varieties of ETF on offer, it’s possible to take a classic three index-fund portfolio and customize it by, say, overweighting particular market sectors or investment styles. Yes, you can also do this with conventional index-mutual funds, but the choice is more limited.

So, what’s your main motivation—cost, simplicity, taxes or flexibility? Fortunately, even if you’re laser-focused on one of these attributes, it’s often easy enough to garner the other three benefits. Indeed, if you stick with total market index funds from one of the major low-cost index fund providers—meaning Charles Schwab, Fidelity, iShares, SPDRs and Vanguard—it’s hard to go too far wrong.

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

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Next Meetup

HUMBLEDOLLAR HELD its inaugural meetup on March 4 in Philadelphia. I initially expected half-a-dozen attendees. We had 25. One couple came all the way from Virginia, while another gentleman traveled down from Long Island, New York.

Lots of pizza, beer and wine were consumed, and folks seemed to enjoy meeting their fellow readers. I spent a little time with everybody in attendance and, by the end, was hoarse after three hours of talking.



So, I figured we should do it again—this time on Monday, Sept. 23, at 5 p.m. I'm announcing the date far ahead of time, in case out-of-town readers want to plan a trip where, say, they attend the meetup and also visit nearby friends or see some of the city's many tourist attractions.

It's the same deal as before: We'll gather 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. The restaurant doesn't take reservations, but things should be quiet at that time. Be warned: Pizzeria Vetri has multiple locations, 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.

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Getting in Line

WE RECENTLY MADE a down payment on our next home. After several months of research, we joined the waiting list for a continuing care retirement community, or CCRC.

We’re in our late 60s and only relocated to our current home four years ago. It’s in a metropolitan area two hours’ drive from our daughter and her young family. We know that perhaps 10 years or so from now, we’ll want to be closer to her, so we looked at CCRCs near where she lives.

We have some familiarity with the CCRC concept. Both of our parents lived in CCRCs and had positive experiences. I serve on the board of directors of a CCRC where we live now. I previously shared thoughts on choosing a CCRC in a HumbleDollar article.

We solicited ideas for which CCRC campuses to visit from some of my contacts. Ultimately, we visited three. There were things to like about each. Our preference was to find a type A community—those that lock in the monthly fee, regardless of the level of care you need. We only found type C communities, where you pay for each level of care at market rates. Type C communities are far more common due to the financial risk that type A communities assume.

All three facilities we visited had acceptable accommodations and amenities. They all appear to have the financial strength for the long haul. We screened for those things before we visited and we weren’t disappointed. In joining the waiting list, one of our intentions is to monitor the organization. Does it continue to maintain its facilities? Does it maintain its financial strength?

As the real estate cliché goes, our final selection was based on three things: location, location, location. Of the three we visited, our choice is closest to my daughter’s house and within a mile or so of one of the hospitals where she works. The proximity of that hospital, its reputation, and all of the associated doctors’ offices and medical facilities were important factors in our decision. On top of that, there was a bustling suburban neighborhood with shops and restaurants nearby.

In the meantime, the waiting list is a form of insurance. For the type of independent villa that we favor, the wait is estimated to be four years. This has grown from about two years when we visited late last year. This is not uncommon with CCRCs.  The over-65 population is increasing much faster than the construction of new CCRCs or additions to existing CCRCs. The demand for the better facilities is increasing, and it's expected to continue to increase. When I called to make appointments to visit, I was questioned about how soon we were thinking of moving. There was no point in visiting if we had an immediate need.

One of the criteria to consider before joining a waiting list: What happens when you get to the top? We don’t expect to be ready to move in four years. For the facility we chose, you simply “float” at the top of the list. If the CCRC makes us aware that a villa is available, we can say no and still remain at the top of the list indefinitely. I consider this insurance: If our health were to change and CCRC living was desirable at any point after we reach the top of the list, we have a place that’s available to us. Neither we nor our daughter will need to scramble to find some place to land.

The cost of joining the waiting list was $5,000. Of that, $4,500 is refundable if we change our mind. The full $5,000 is applied to our entrance fee. It’s also fully refundable if we die without moving in. The “insurance” cost is the forgone interest earnings or, if we decide to go elsewhere, $500 plus the forgone interest. As a person who likes to plan ahead, this strikes me as a small price to pay.

Howard Rohleder, a former chief executive of a community hospital, retired early after more than 30 years in hospital administration. In retirement, he enjoys serving on several nonprofit boards, exploring walking paths with his wife Susan, and visiting their six grandchildren. A little-known fact: In May 1994, Howard was featured—along with five others—on the cover of Kiplinger’s Personal Finance for an article titled “Secrets of My Investment Success.” Check out his previous articles.

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I Had the Dream

I RECENTLY SHIFTED from part-time work to complete retirement. I closed my laboratory, published my final research findings, and handed over my teaching duties to a bright-eyed, newly minted assistant professor.

After I cut the career cord, my retired friends cautioned me that I’d likely experience a multifaceted, work-related dream, similar to those described by Andrew Forsythe in a recent article. They just didn’t tell me it might be a nightmare.

Sure enough, a few nights after retiring, I had “the dream.”

I found myself at my own surprise retirement party, conveniently held in my office, which—in a sort of Lewis Carroll way—had miraculously tripled in size. The distorted room was decorated with banners and balloons.

Dozens of vibrant students and young professionals were in attendance. Oddly, I didn’t recognize more than a handful of individuals, and those I knew weren’t work colleagues. I stood distant and apart from the guests. No one ventured in my direction to shake my hand, clap me on the shoulder or give me a much-needed hug.

Rather than interacting directly with me, the guests began taking my books, lab equipment and office supplies. Perhaps they desired keepsakes to remember me, although none asked me to sign any textbooks. They also took fancy chocolates and my espresso machine, items I never kept in my office in real life.

I politely asked the dream people to return the chocolates, but no one could hear me. People continued to arrive and remove contents, ignoring my watchful gaze. Eventually, someone arrived with a dolly and took my desk, chair and computer. Oddly, the monitor and mouse were left behind.

As the dream progressed, my former department chair informed me that I needed to say a few words about my career accomplishments. I excitedly thanked him for the opportunity to speak, even if it represented a public speaking experience at a moment’s notice.

After a minute to gather and crystalize my thoughts, I was given a microphone. By the time I took the podium, however, everyone had disappeared. The office was now stripped to bare walls. The only remaining artifact was my framed graduate school diploma, which hung askew.

I scanned the room, seeing only a few scattered chocolate bar wrappers and coffee beans. Eventually, an elderly gentleman with a broom arrived to sweep the floor.

Retirement parties are supposed to be a confirmation of our achievements. Remember what Warren Buffett said about knowing who’s swimming naked when the tide goes out? Well, I felt like the guy waiting for the tide to reverse, wondering if I’d accomplished anything of value.

To make matters worse, I suddenly sensed I’d lost my phone and car keys during the “celebration.” That pushed me over the edge. True anxiety set in. I hurriedly left the office, with my heart racing and blood pounding in my ears. I ambled aimlessly down empty corridors, hearing muffled conversations taking place behind closed doors. After what seemed like an eternity, I finally exited the complex.

I soon found myself walking within a small wooded grove with a bubbling stream. At that point, I stood perfectly still and simply watched dragonflies flit about, just out of reach of hungry goldfish below the water’s surface. Eventually, my anxiety departed and I welcomed a returning sense of calm. Along with that feeling came an abstract satisfaction of discovering a world outside my work that was presumably always within reach, albeit unbeknownst to me before my departure.

I awoke, realizing I had just experienced “the dream.” As a confirmation of survival, my phone was beside me on the nightstand, next to my keys.

Now, I’m certainly not an expert on dream interpretation. But it doesn’t take a rocket scientist—or a retired molecular immunologist—to see this dream as an expression of fear about losing my career identity. Perhaps it was an unconscious coping mechanism to help me move on to whatever new adventures await.

Of course, the dream may also have been a manifestation of an undigested bit of beef that I ate the night before. I’ll likely never know.

Jeffrey K. Actor, PhD, was a professor at a major medical school in Houston for more than 25 years, serving as an academic researcher with interests in how immune responses function to fight pathogenic diseases. Jeff’s retirement goals are to write short science fiction stories, volunteer in the community and spend time in his garden. Check out his earlier articles.

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Good for Them?

BETWEEN INVESTMENTS and our two homes, Connie and I have accumulated a respectable net worth. I don’t expect we’ll need those assets to live on. What will happen to our money?

It’ll continue to grow, I hope. I want to be sure there’s sufficient wealth if, say, we need to pay for long-term care.
I want the income generated by our investments to be available to Connie, should I predecease her. She’ll also receive Social Security and survivor benefits from my pension.
We currently give modest amounts from my annual IRA required minimum distributions to our children.
We want to leave as much as possible as a legacy to our children.

It’s that last point that can be controversial. Is leaving a significant inheritance to children or grandchildren a valid retirement-planning goal? I say yes. In fact, if you can afford it, I view it as an obligation.

Warren Buffett once wrote in a shareholder letter that he recommends that super-wealthy families "leave the children enough so that they can do anything but not enough that they can do nothing." He’s giving away 99% of his money to charity.

For Connie and me, we’re not talking billions or even many millions. But we have more than most folks accumulate over their lifetime.

I’ve posed the legacy question to several people, and opinions vary. Some jump to the conclusion that retirees wanting to leave behind a healthy inheritance are depriving themselves. I don’t agree. But I also wouldn’t suggest leaving a financial legacy if it means that retirees shortchange themselves.

Several people I spoke to said they’d taught their children to be responsible and to support themselves, and they don’t “deserve” anything from their parents. I think that misses the point. It’s not a matter of deserving. I wouldn’t bail out a lazy loafer or spendthrift. But that doesn’t mean responsible children don’t deserve assistance or perhaps a better start on their retirement savings than I had.

Generational wealth creates dependence and entitlement, I was told. Yeah, maybe for the Vanderbilts or others at the 0.1% level. But I disagree when it comes to us mere mortals.

A woman told me she’d be disappointed if her parents left her a large legacy. “They didn’t start out rich. They earned that money themselves. Now, their kids and grandkids have plenty, and they should be enjoying life to the fullest.”

There it is again: the idea that leaving a legacy and enjoying life are mutually exclusive. I wonder if this woman has considered that, when parents help their children, it might boost the happiness of the parents.

There’s the notion that, because the parents paid for college and the children are now doing well, it’s okay for the parents to spend down to zero. Some even claim that teaching them to stand on their own is itself a legacy, while “propping them up” is a disservice and teaches laziness and entitlement.

Meanwhile, others told me that they’d raised their children to work and to support themselves, and also to understand the importance of saving and investing. But they don’t view that as incompatible with leaving them financially secure. One man said that he couldn’t relate to the philosophy that “it’s good for them” not to receive an inheritance.

My bottom line: provide adequately for yourself and your spouse. Enjoy retirement as you define it, but also pay it forward—by pondering how your financial success can benefit others.

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

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Charging Ahead

I GREW UP DURING the muscle car era. That was when Detroit automakers became aware of the baby boomers’ buying power.

The boomers, of whom I’m a proud member, didn’t live through the Great Depression. We had television, frozen foods, Mattel toys and a car in every driveway. Prosperity is what we were used to, and we loved it. It seemed everyone had jobs, so there was money to spend.

My friends and I felt that having a nice car was the key to getting that special girl. This led boys to modify their jalopies to become hot rods. Seeing all this tinkering under the hood, Detroit decided to deliver fast cars right out of the showroom. No mechanical modifications were required to smoke your tires. The muscle car era had begun.

What made these cars pop? In the beginning, it was simple: bigger V-8 engines. But these engines were gas guzzlers. When gas prices surged in 1980 to $1 a gallon and higher, car buyers still wanted speedy cars, but with more miles per gallon. The auto industry came up with two ways to increase horsepower without increasing the engine size—turbocharging and supercharging.

With turbocharging, a fan blade spins more air into the engine’s cylinders, while another blade sucks out combusted fumes. More air going in draws more gasoline, resulting in a bigger bang and more horsepower. It doesn’t take any power from the engine to produce this increase in horsepower.

The second way is supercharging. A blower forces more air into the engine. A pulley belt is attached to the engine to run the blower. It takes power from the engine to produce more horsepower. That makes it less efficient than turbocharging, but it can be faster off the line in short bursts.

What does all this have to do with managing money? You can attempt to supercharge your wealth by investing a great deal of time and money in software to identify the stocks with seemingly strong prospects. This method can make you feel more in control—you have a reason for purchasing the specific companies you own.

Alternatively, you can take the more efficient route, and turbocharge your portfolio by investing in index funds that own everything, even those stellar stocks you’ve never heard of before—stocks like chip maker Nvidia, whose shares jumped 237% in 2023 on the back of the artificial intelligence revolution.

Buying an index fund can seem boring compared to stock picking. There’s no deciding when to buy or sell, no cocktail party stories to tell. You simply own the entire index and go along for the ride.

Yes, you’ll miss the elation of picking a stock that races ahead of the broad market. But what if your hot rod stock misfires? You'll wind up behind the pack, languishing on the side of the road. Which car do you want to drive?

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What Advantage?

WHEN MY FATHER DIED, my mother moved to be closer to me. I didn’t know anything about Medicare, but I knew she needed health-care coverage.

I would call up Medicare and ask questions, and the phone reps would read me a script. I’d ask another question and they’d read me the same script. Rephrase the question, and I’d get the same useless scripted responses.

I had no idea about the difference between traditional Medicare and Medicare Advantage. I chose Anthem Blue Cross Blue Shield, since it was a familiar name. I was steered toward a Medicare Advantage plan. It was touted as convenient and low cost, with additional benefits such as vision care, dental and reimbursement for gym fees. Who wouldn’t want a Medicare Advantage plan instead of some other costly, more confusing plan?

Initially, the Medicare Advantage plan worked well for my mother—that is, while she was relatively healthy. Then she moved into an assisted living facility in Stamford, Connecticut. None of the doctors, podiatrists and physical therapists who came to her facility would accept Medicare Advantage plans, because the plans paid them far less. I had to find doctors that would take her Advantage plan, and then drive her to her appointments.

My mother had quit smoking 20 years earlier. Still, prior to that, she had smoked for almost 50 years. She developed COPD, or chronic obstructive pulmonary disease. I had to get her an oxygen concentrator. Unfortunately, her Medicare Advantage plan would only pay for a huge oxygen concentrator, not a portable one. This meant that, if she wanted to breathe well, she had to stay in her room. She couldn’t go anywhere unless she wanted to go without oxygen.

The pulmonary specialist and I appealed and appealed this decision to her Medicare Advantage plan. I finally got the portable oxygen concentrator approved, but the only company that would accept Medicare Advantage was a poorly run medical supply company. After calling every executive at the company, I got her the portable unit. If she’d had traditional Medicare, the portable oxygen concentrator would have been authorized much faster and I could have dealt with better-run medical supply companies.

My mother developed pneumonia and the assisted living facility sent her to Stamford Hospital. Medicare Advantage did a good job of covering her hospital expenses. Since she was in bed for more than a week, she needed to go to a rehabilitation facility to avoid being wheelchair-bound for the rest of her life. She was transferred to a rehab facility that took Medicare Advantage. The rehab facility and I had to keep calling Anthem Blue Cross Blue Shield to get her stay extended.

Eventually, her time ran out and she was transferred back to assisted living. Unfortunately, the physical therapist who worked at my mother’s facility wouldn’t take Medicare Advantage because of the low payments.

My son Jake had recently graduated college and wasn’t starting his job for a few months. Every day, he went to visit his grandmother to get her walking. He was the only one who could get her out of her wheelchair.

The final straw: I was notified by Anthem that my mother’s Medicare Advantage plan would no longer pay for her COPD inhaler that she needed daily to breathe. Then came a pleasant surprise. By pure dumb luck, my mother was living in one of the four states—New York, Connecticut, Massachusetts and Maine—that required Medigap plan providers to accept seniors without regard to preexisting conditions.

Why is that important? If you’re in a Medicare Advantage plan, it’s often effectively impossible to switch to traditional Medicare because you can’t qualify for an accompanying Medigap policy. Indeed, in any state other than the four states mentioned above, it’s highly unlikely that an insurance company would sell a Medigap plan to a woman in her 90s with COPD.

We had to wait a number of months for the annual enrollment period. I then switched her to traditional Medicare, plus a Medigap plan from Blue Cross, plus a drug plan. Big difference. Any doctor who came to my mother’s facility was thrilled to take traditional Medicare.

Instead of driving her to the nail salon to get her toe nails trimmed, the podiatrist who came to her assisted living facility every week took care of this. Similarly, the doctor who came to the facility now saw my mother, so I didn’t have to drive her to appointments.

What Medicare plan am I going to choose when I turn 65? I know the plan I select during the initial enrollment period is likely to be the plan I’ll have for the rest of my life. It’s an easy choice: traditional Medicare.

I’m willing to forgo Medicare Advantage extras such as vision care, dental and gym fees. I’m also willing to pay higher premiums to ensure that I have the best medical and drug coverage. My priority is a plan that’ll allow me to choose the best facilities and doctors. I’ll also pick the most comprehensive Medigap plan available, which is currently Plan G.

Lucretia Ryan is the founder of FinancialFreedomforWomen.org . A graduate of Cornell University, she spent her career at IBM.

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Fox in the Henhouse

ALBERT EINSTEIN reportedly once said, “The hardest thing in the world to understand is income taxes.” Which makes me wonder: How did I end up wandering into this mind-boggling field? 




I like knowing how my money gets taxed because it helps me better control our finances. By managing taxes, we can significantly boost how much money we have for retirement.




Why is the tax system so complicated? The system is trying to do more than just collect taxes. Congress uses the tax code to try to achieve economic and social goals, and then relies on an overburdened IRS to deliver on those plans. It would be far better for the IRS to concentrate its efforts on collecting revenue—its primary purpose—and let other federal agencies monitor social policies.




The U.S. tax code is a master class in complexity. If you prepare your own return, you need a lot of patience and usually find yourself reading the instructions more than once. Today’s tax laws unnecessarily burden America's taxpayers and make voluntary tax compliance far too difficult.




The two top dogs in tax-preparation software are TurboTax and H&R Block. I’ve also had good results with FreeTaxUSA. It supports most tax situations and forms, without incessant handholding. It charges if you want live help, and also for state tax returns.




Now, the IRS wants to get in on the action. Its new Direct File pilot program, a free tax-filing program, is currently available in 12 states. The program doesn’t prepare state returns, nor can you use it if you itemize deductions, have more than $1,500 in interest income or claim certain tax credits. In other words, as currently designed, it’s only meant for people with simple tax situations.




The thinking is that, if the pilot plan is successful, it’ll be expanded to handle more complicated returns. Some folks like the idea of IRS Direct File. Others feel it’s like putting the fox in charge of the henhouse, and that private industry is doing a fine job of providing free and low-cost tax filing.




What’s your opinion?

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Not Wired to Retire

MY HUSBAND SAYS I'LL never retire. He’s right. Now in my 78th year, I have no intention of stopping work altogether to devote myself to round-the-clock leisure. That sounds unappealing, especially since I plan to live well into my 90s, just like my great-grandmother.

Most of my friends opted to retire in their 60s. That includes my husband, Charlie. He retired at age 61 after 38 years as a nuclear engineer, all that time with the same company. Following the death of his first wife, Charlie continued to work at his challenging job for several more years, and then decided he was ready to go. Doing the math, he was confident that his pension and substantial savings would be more than enough to sustain his retirement. That was the right decision for Charlie.

What about me? I continued my financial planning practice until age 67. But after selling that business, I wasn’t ready to retire. Rather, I shifted to an encore career that involved writing, speaking and doing research on widows, including the financial issues they face and what advisors can do to help them.

That soon became a full-time commitment, including giving almost 300 presentations nationwide. I wrote for or was featured in more than 150 related publications. During this six-year phase, I maxed out my retirement savings. I also increased my charitable contributions to my “Moving Forward on Your Own” personal-giving fund, which is managed by the Community Foundation Tampa Bay. I was having too much fun to consider traditional retirement.

But as the seasons changed, so did my priorities. It was time for another shift. My stamina decreased, and the allure of constant travel and hotel living waned. I wanted to spend more time with my new husband and the activities I enjoyed in our community. So, at the end of 2019, two weeks before I turned age 73, I resigned from this encore career. It was perfect timing—because, in early 2020, the pandemic shut down the world.

It was a time of reflection, not only on the past but also on exciting possibilities that could lie ahead. Looking back on my life, the one thing that remained constant was change. I had shifted occupations several times, picking up new skills and credentials along the way, repackaging existing abilities, and reinventing myself many times.

My life started as a farmgirl. My first career was teaching in public schools for five years, while earning my PhD. Next, I became a university professor for five years, earning tenure. After that, I entered the nonprofit sector and worked as a development and communications director for a dozen years. Along the way, I earned the Certified Fund Raising Executive credential and, after further rigorous education, I added the Certified Financial Planner designation.

With yet more training and mentoring, I launched Rehl Financial Advisors at age 49. It remained a specialized practice by design, focused on philanthropic planning and assisting surviving spouses. There was always a waiting list for prospective clients, and the firm was often featured in the media. But I didn’t want to do that work forever. That’s why, a few years after my late husband’s death and after writing a financial guidebook for widows, I shifted to my six-year encore career focused on widows.

Amid these professional changes, I also experienced many personal changes, including divorce, being a single parent, remarrying, the premature death of that spouse, death by suicide of my stepdaughter, death of my ex, death of my parents, and several moves across the country.

After ending my encore career, what awaited me wasn’t a conventional retirement marked by withdrawal from life and a retreat into restful oblivion. Instead, I stepped into “refirement.” The authors of The ReFirement Workbook coined the term as an invitation to explore who one wants to be and do in later years. I identified five “F” words and phrases that were vital to me and continue to be so today: family, fun, focused-purpose, friends and fitness—including fitness of body, mind, spirit and money.

I continue to enjoy growing, learning and working part-time. According to Harvard Business Review, two-thirds of older Americans share my view that retirement is another chapter in life, with new ambitions and purposes. Today, I’m adjunct faculty at The American College of Financial Services, teaching in its Chartered Advisor in Philanthropy program. I write and speak about legacy and longevity planning at a few select conferences, mentor surviving spouses, and help nonprofits strengthen their endowments.

Hubby is right. I’ll never retire—because this new chapter continues to bring me great joy.

Kathleen M. Rehl owned Rehl Financial Advisors for 18 years, followed by an encore career empowering widows financially. She authored the award-winning book, Moving Forward on Your Own: A Financial Guidebook for Widows. Today, Kathleen helps nonprofits with their endowments, pens legacy stories and is an adjunct at The American College of Financial Services. You can learn more at www.KathleenRehl.com. Check out Kathleen's earlier articles.

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