Jonathan Clements's Blog

Recently, Mum got lost on her way to my house. We live just a mile apart.

Fortunately, I located her using Find My Friends and took her to her doctor’s appointment. My strongest feeling was relief. It could have been far worse, and I was grateful to be there.

On the way to the appointment she acknowledged being lost. She recognizes my house by the tall Italian cypress trees out front, but she never made it to our street. She spoke about the changes she knows are happening to her.

Then she asked me to help her stay in her apartment. She doesn’t want to move into memory care.

I told her we would do our best to make her apartment safe, knowing we’ll need to reassess as her needs change.

Mum moved into an independent living facility about seven years ago, partly to avoid becoming a burden to her children. She made a substantial, nonrefundable payment for her apartment and continues to pay a significant monthly fee. She had planned ahead.

But independent living has its limits. Emergency help is available, and memory care is offered at no additional cost in a different building. Moving there would mean leaving her apartment, where ongoing care isn’t included. For now, we believe family support can meet her needs: being available, taking her to appointments and noticing when something once straightforward becomes difficult.

Over the past year, since Tory and Jonathan passed away, my involvement in Mum’s life has increased. Caring for her stretches across all 365 days. There are occasional breaks, though usually brief.

My husband, Joey, is a big help. Other family members have helped for a few days, which I appreciate. When Joey and I go away for longer, arranging support becomes more complicated.

It can be worrisome and tiring. I want to be there for Mum, and I also want time with Joey. Making room for both requires help.

Hiring someone is one possibility, but in-home care is expensive, and Mum feels having someone following her around would be invasive. She wants to retain control over her days.

Elaine asked what we would do if I didn’t live nearby. Given Mum’s reluctance to accept outside help, I believe we would need a rotating family schedule so one of us could be with her. That would place demands on our time and disrupt our plans. But she’s our mother, and I feel responsible for helping work through those difficulties.

Her wishes matter. So does being honest about the changes we’re seeing. We’ll need to keep talking with Mum and one another about what’s working and where she needs more support.

I don’t want regrets. I want to know I did all I could for her. That includes asking for help and sharing the responsibility. It takes a village, even when that village is only a handful of people.

This experience has made me consider my own future. Retirement planning includes where we’ll live and how we’ll pay for it. Mum considered both. But who will we turn to for support, and how willing will we be to accept it?

I can’t promise Mum she’ll always be able to stay in her apartment. I can promise to listen, stay involved and work with the family to help her.

That day, I was relieved to find her and be beside her as she told me what was happening. For that moment, she didn’t have to work it out alone.

The post Just A Mile Away appeared first on HumbleDollar.

I got this email from Dr. Wade Pfau's Retirement Researcher.  I signed up for the Zoom sessions to get free access to their Tax Map Calculator.  I figured folks here may want to educate themselves on their effective marginal tax rate as well.

Hi Randy,

If I asked what tax bracket you're in, you could probably tell me. If I asked what your next dollar of income would cost you in federal taxes, that's a harder question.

The bracket is only part of the answer. Add a dollar of income in retirement, and the rest of the tax code can pile on. That dollar might make more of your Social Security taxable. It might push you past a Medicare threshold and raise your premiums for a full year. It might shrink a deduction you were counting on, like the new deduction for people 65 and older.

The combined effect is what I call your effective marginal tax rate. It's the number that tells you whether a Roth conversion or harvesting capital gains makes sense for you this year.

That's why we're running the Tax Planning Challenge. Over three live sessions, you'll use our Tax Map Calculator to plot your effective marginal tax rate from your own 2026 numbers, then see whether you have room for Roth conversions or gains harvesting before the tax year closes.

Tax Planning Challenge
​​​​​​​
Monday- Wednesday, November 2nd-4th
12:00 to 2:00 PM ET | Live Online | Free

 

Save My Free Seat

Hope to see you November 2nd,
Wade Pfau, Ph.D, CFA, RICP
Retirement Researcher

PS. The Challenge is educational, not tax preparation. You'll learn a framework for spotting your own opportunities, and I'd encourage you to talk with a tax professional before acting on what you find.

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I received a notification from Schwab about the Securities Lending Fully Paid Program. Seems like a good idea to earn some extra income without the risks of options trading. Would like to hear from anybody who has participated in this program. Any downsides?

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whenI have poured my coffee every morning and sit down my first task is to grab my pad and check my email. Usually go right to Humble Dollar, but for the past 6 months have begun with Daily Ideas email from Adam Grossman, Daily Ideas are daily emails for a year with very short financial thoughts (can sign up for through his website Mayport Wealth Management).

Today’s email was a thought from Jonathan, "Retirement is like a long vacation in Las Vegas. The goal is to enjoy it to the fullest, but not so fully that you run out of money."

My immediate reaction was yup sounds just like Jonathan (short, on point, and with a touch of humor), and a smile.

The post Great Quote From Jonathan appeared first on HumbleDollar.

I came across an interesting article on how stocks have historically performed in the nine months after US mid-term elections. It’s non-partisan, so it shouldn’t ruffle any feathers. Here’s a gift Link if you'd like to read it.

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EARLIER THIS YEAR, Pacific Life Insurance Company agreed to settle a class action lawsuit brought by policyholders. At issue were marketing materials that its customers argued were misleading. While Pacific Life admitted no wrongdoing, it agreed to a settlement of $58 million.

This wasn’t an isolated case. Insurers that sell permanent life insurance policies, including whole life and universal life, are often on the receiving end of lawsuits because of the way that they promote their products. In another recent case, the late race car driver Kyle Busch sued his insurance agent, arguing that he’d sold him coverage costing millions that was billed as a “tax-free retirement plan.”

These cases highlight the fundamental issue with permanent life insurance: Unlike term life policies, whole life and universal life policies combine two somewhat separate features in a way that often leads to confusion. On the one hand, they provide life insurance. That part is straightforward. But they also include an investment account—referred to as “cash value”—that sits alongside the insurance.

These lawsuits and other criticism of permanent life insurance products stem mostly from the way the investment component is advertised. Because no one can predict how any investment will perform in the future, life insurance salespeople provide prospective customers with illustrations of how the investments might perform over time. The problem, though, is that these are merely projections, and disappointment can result if the reality of the cash value’s growth falls short of those illustrations.

It’s for that reason that I don’t recommend permanent life insurance. Instead, my recommendation is to opt for simple term coverage, which provides insurance without the complication of an investment component.

If you’re shopping for term coverage, though, there are still some questions to consider, including the following:

Should everyone have life insurance? If you aren’t married and have no dependents, then I’d argue you do not need life insurance. Some salespeople will make the case that you should purchase coverage when you’re young, before you have a family, because you’ll receive a better rate, but I’d be wary of that argument. If the insurer is offering you a better price on a product you don’t need, that doesn’t somehow make it a better deal.

Another group that typically has no need for life insurance: folks who are financially independent. If you’re retired and living off of your savings, or have assets sufficient that you could retire, then in that case, you likely don’t need life insurance.

One exception to the above might be for business owners, where life insurance can help facilitate buy-sell agreements between partners, but that is a narrow use case.

How much coverage should you purchase? I suggest the following formula.

If you own a home and have a mortgage, I would start with the mortgage balance. While it isn’t necessary to pay off the mortgage when a spouse or parent dies, I’ve found that it can make life much easier for survivors if they aren’t burdened by a mortgage.

If you have children, I would total up the estimated cost of all of their future tuition. Depending on their ages, this can be a difficult exercise because college costs vary so widely and because tuition has historically increased faster than inflation. In addition, some children might earn scholarships, while others might attend pricey schools and go on to graduate school. Recognizing these unknowns, I suggest making your best guess, perhaps going with the midpoint of the highest and lowest potential numbers.

The next step would be to build an endowment of sorts to fund annual living expenses for your family. For this element, you could approach it the same way you’d think about building a portfolio for retirement. Suppose, for example, you’d like your family to have $100,000 per year. Assuming a 4% or 5% portfolio withdrawal rate, that would translate to a portfolio of $2 to $2.5 million.

For the endowment portion, keep in mind that you can subtract your existing savings. If you already have $1 million saved, that would reduce the coverage you’d need by $1 million.

The final element in deciding how much coverage to purchase: Be sure to round up. As we’ve seen in recent years, inflation can stretch budgets. And your family’s needs might simply change over time.

How long a term should you choose? In working through this formula, you’ll likely notice a wrinkle, which is that some needs are temporary while others will be longer term. Tuition, for example, will have a defined timeframe. The endowment for living expenses, on the other hand, would need to provide for your spouse’s needs indefinitely.

Fortunately, term life insurance is flexible, and there are two ways you can cover differing time periods. The first strategy would be to purchase two policies. The first would provide funds for tuition and would be timed to expire when your youngest child is age 22 and likely out of school. The second policy, to meet ongoing expenses, would be timed to expire around the time you expect to reach financial independence—around age 60, for example.

An alternative approach would be to purchase a single larger policy. Because it can be difficult to predict both your family’s needs and the growth of your savings over time, the single policy approach can, counterintuitively, provide greater flexibility than committing to two separate policies. That’s because many term policies allow the coverage level to be dialed down at the owner’s request.

If you’re married, should each spouse carry their own coverage? In this case, the approach I suggest is to insure each spouse in relation to the income he or she brings in. Even if your family could survive on one income, a reality is that when one spouse dies, the other may not be able to work as much. That’s frequently the case when there are children at home. So I recommend that both spouses carry life insurance until it’s clear you’ve reached financial independence.

What if you have group coverage through your employer? On the one hand, this is a nice benefit, but since you might change jobs in the future, I wouldn’t factor in the benefits of any employer-provided coverage.

A final point: While life insurance is important, don’t overlook disability coverage, which can be just as important.

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.

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FOR MORE THAN 20 years, I worked as a personal trainer. Now I’m a financial advisor. On the surface, the two professions look nothing alike. Human behavior makes them far more similar than most people realize.

Years ago, one of my fitness clients joined Weight Watchers. At her intake meeting, she asked whether she should cut back on carrots because she’d heard they're high in sugar. The specialist didn't miss a beat. She smiled and said “No one ever comes to us because they eat too many carrots."

The money version is just as true. People often fixate on a detail that barely moves the needle. I’ve watched people agonize over choosing this fund or that fund while saving just 3% of their pay. People follow the financial media frenzy for fear of missing out on the next big winner. This is akin to revamping your entire routine every time the latest weight loss trend hits the market. 

On and Off the Wagon

Over my years as a trainer, I watched the same pattern again and again. People went on an aggressive diet, then off it. They started a workout program, then quit. They joined a gym, then rarely set foot in the door.

Plenty of others showed up consistently, but they simply went through the motions. They strolled on the treadmill while reading a magazine or watching TV. They lifted weights that never challenged them. Going through the motions beats going through no motions, but it rarely gets you the result you want.

Trainers have a metric for this. It’s called RPE, short for rate of perceived exertion. RPE is a scale used to measure how hard your body works during physical activity based on how you feel. I often asked my clients, “On a scale of one to 10, how hard did that feel?” A one is sitting on the couch, and a 10 is the absolute maximum effort you can handle.

Muscles, fitness and health only improve when they’re pushed past comfortable. It’s called overload. Someone who wants to lose 30 pounds needs both better eating habits and workouts hard enough to count. Cutting back on carrots is not the problem to solve.

Your Financial RPE

It didn’t take long to realize my financial planning clients were displaying similar behaviors. Some experienced a burst of energy to tackle important tasks. Then life got in the way, and the work landed on the back burner, half finished.

Others enthusiastically told me all about their early retirement dreams. The minimal effort they were putting in today wasn’t going to get them there.

Still others were on track but working at a perceived exertion of a 9 or 10 in their 40s and 50s. They saved so aggressively, or worked so much, that they were missing out on life. I applaud the effort, but it isn’t sustainable. I worry these clients will have regrets later in life. Are they missing out on valuable family time while the children are young? Are they working so much they’re neglecting taking care of themselves?

In both fitness and finance, you need to identify what you hope to achieve and make a plan to get there. You also need to reevaluate as the decades pass. What worked in your 30s is likely not the right strategy in your 50s. Every human body gets more complex and delicate with age, and your financial life does, too.

The Hard Lifts

In the gym, the exercises people avoid are usually the most important and effective ones. Sometimes that’s cardio. Sometimes it’s lunges. These exercises are uncomfortable, so people find reasons to skip them.

Money has its own hard lifts. The task you’re avoiding is likely the most important one on your list. You avoid it because it makes you uncomfortable and it’s hard to get started. It’s a 9 or 10 on the financial RPE scale.

I see high income earners in their 30s and 40s continue to increase their spending with each raise yet not increase the savings rate along with it. I see completing an estate plan as one of the most delayed, yet extremely important financial lifts we each need to address. First time parents are eager to open their first 529 plan and begin saving for college but life insurance? That can wait. Opening a college fund for an infant feels productive and gratifying. Facing mortality or making tough family decisions is stressful and overwhelming. 

My training clients told me they didn’t have enough time. My financial planning clients tell me they don’t have enough time.

When will you have time to address your health? When will you have time to address your wealth? Every year you put off your health is a decision you may pay for dearly later in life. Every year you put off saving is a year compounding can’t work in your favor. It raises the risk you can’t support yourself financially or can’t live your later years the way you hope.

Check Your RPE

Here’s my challenge. Pick a financial goal you’re chasing, or a task that’s been sitting on your list for a while. Rate your effort honestly, from one to 10. Then ask whether that number matches the goal you set for yourself.

Health and wealth fuel each other. The money you accumulate is only enjoyable if you’re healthy and happy enough to use it. Ideally, it pays for more adventures than doctor bills.

What’s a reasonable financial RPE to strive for? Well, that depends on how financially fit you are. And that’s a topic for a future article. 

In the meantime, eat your carrots. Lift the heavy thing. And check your financial RPE.

 

Annie Garland, CFP®, is a wealth advisor at WealthClarity in Lakewood, Colorado. She spent more than 20 years as a personal trainer before becoming a CFP® professional. She’s a proud mom of two daughters, a wife, and an avid mountain biker.

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Starting January 1, 2027, there’s a brand new federal tax credit that many people haven’t heard of yet. It’s called the Education Freedom Tax Credit. You basically donate cash to a nonprofit that funds K-12 scholarships, and you get a credit (not a deduction) against your federal income tax.

The nonprofits are called Scholarship Granting Organizations (SGOs). They’re public charities that spend at least 90% of their money on scholarships, which can cover private school tuition, tutoring, special-needs services, books, and supplies.

The credit is up to $1,700 per person, or $3,400 on a joint return.

Individual states have to opt in, and 30 have so far. But you can give to an SGO in any participating state, even if your own state hasn’t opted in. Of course, many people want to donate to an SGO in their own state, so that’s just something good to know. Here’s a list of states that have opted in so far. States have until February 15, 2027 to opt in.

After they have opted in, they will be to identify SGOs in your state. The IRS then will have a list available that you can reference before making your donation.

After donating, tell the SGO when you give that the gift is meant for the credit, and keep the written acknowledgement with your donor number. The SGO has to send it by January 31 of the following year. You won’t have to give them your Social Security number.

A 2027 gift gets claimed on your 2027 return, which you’ll file in 2028.

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At my grandson’s interschool soccer tournament yesterday, I found myself in conversation with his school principal. He told me my grandson has hit his yearly target of one million words read and will be recognised at the school harvest assembly. This was news to me, so I asked what the thinking behind the programme was.

The principal explained that the million-word benchmark is a practical way to build vocabulary and cognitive stamina, which he described as the biggest driver of long-term career and financial success. Over several decades, the Johnson O’Connor Research Foundation tested tens of thousands of professionals across industries and found that vocabulary size was the best single predictor of occupational level and earning power. It tracked income and managerial rank more closely than native IQ or years of formal schooling.

A child who reads a million words a year, he said, meets roughly 85,000 different words in context. That builds what economists call crystallised intelligence: the ability to follow complex arguments, write persuasively and communicate clearly when the stakes are high.

He then turned to the money. Labour market data from the US and UK suggests that adults with “proficient” prose literacy earn around $1,000,000 more over a 40-year career than those with basic or below-basic skills.

I never got to ask a follow-up, because a pupil was fouled and the principal went sprinting across the pitch to share his views on the referee’s decision. Still, the conversation stuck with me. If I’d read more in junior school, might I have an extra million in my retirement account? (I’d settle for a decent COLA adjusted pension and a better vocabulary for describing referees.)

As for the match, poor refereeing notwithstanding, the team won and moved on to the next round of the school cup. So if reading doesn’t make my grandson his extra million, perhaps sport will.

The post A Million Words to a Million Dollars? appeared first on HumbleDollar.

On Sept. 30, 2026, the Securities and Exchange Commission proposed two rule changes which would allow performance based compensation as an option on certain registered management investment companies. Here is a link to a fact sheet of the SEC announcement about the proposed changes.

The rule changes seems to allow hedge fund like fee compensation to be paid from certain mutual funds and ETFs. I think such performance based compensation is opposite the reasons such funds came into existence.

Buyer beware if these rule changes are adopted.

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