Jonathan Clements's Blog

I paid the property taxes on my vacation home the other day. That got me thinking about the reality and impact I have on the local area and the ongoing debate around property prices.

I suspected property prices in the small coastal village where I have a vacation home were inflated, partly because of owners like myself buying in the area. But I recently discovered just how bad things have become. The village has the largest disconnect between median wages and median house prices in my entire region: properties cost 11.3 times the median annual wage. Only a few extremely wealthy areas around the capital city are worse. The report's authors described it as "critically unaffordable for the local population."

I don't know how to process this information. Selling up wouldn't help, another outsider like myself would just buy the property, probably turning it into a short-term vacation rental. That's another area the report highlighted as placing extreme stress on local residents, with median rental costs exceeding 50% of median income.

I'm maybe not the worst vacation owner. I spent all of last summer at the property and plan to be there even longer this year. I make a point of using local businesses and contribute generously to charity events. I've helped fund a Halloween festival and fireworks display for the whole community. But it's just a sticking plaster, it's certainly not going to help a local find a home in the place where they played as children.

The council is currently drafting legislation for a 100% property tax increase on vacation homes and short-term rentals. The funds would be restricted to purchasing land for affordable housing—both for sale and rent—for local residents. I'm generally against targeted tax rises, but this one, as long as it's targeted at affordable housing, I'd pay without complaint if it becomes law.

Last summer, the council canvassed opinions from all residents and property owners in the region. I drafted and sent a letter of support to the local council board considering the property tax change. From what I've learned from my neighbors, I'm in the minority, most second-home owners don't see themselves as part of the problem. I do, and I'm happy to be part of the solution. It's the least I can do for the local population of the area I love.

I want to be more than just a seasonal visitor; I want to be a neighbor who recognizes that for my coastal retreat to remain a home for me, it must remain a home for those who were born here…who would ever have believed I'd be advocating for a tax rise? It's a strange old world!

 

The post Decoupled From Reality appeared first on HumbleDollar.

I love a New Year. It’s a great time to evaluate your current situation and make changes as necessary. Here’s what I’ve been up to recently:

1. We adjusted the tax withholding for our Social Security payments. Current withholding options are 0%, 7%, 10%, 12% and 22%. We reduced our withholding from 15% to 7% since our income is lower than when we were working and refunds were getting too large.

2. We opened a new checking account with a $500 sign-up bonus and couldn’t be happier with the improved service. It was a big job to make this change as our direct debits and deposits had to be moved to the new account and, since we pay all of our bills electronically, I needed to set that up as well.

For a couple months, we had both accounts open as we couldn’t close our old checking account until everything had properly changed over. Social Security took around two months to make the switch. Luckily, everything went seamlessly.

3. I decided on new tax software for this year. Thanks to Marjorie, Dan and Andrew for their endorsement of FreeTaxUSA. I did a little research of my own and couldn’t find a bad word about it.

4. I did my usual review of our 2025 year-end account balances and everything did well. I might change the asset allocation a bit in our IRA’s. For those who take RMD’s, it’s great to use those to rebalance your retirement accounts.

5. Jonathan wrote a great article last January called “Spending It”. I chose the Fixed Withdrawal Rate option with the goal of withdrawing up to 5% annually for living expenses. Last year, we used 4.8% which is almost exactly the same as the year before.

6. I read a non-financial resolution in a recent Kiplinger article that I’d like to share. It says to “Let go of old habits, relationships and commitments that no longer serve you.” That resonated with me.
 
Francine Duke

The post Checks and Balances appeared first on HumbleDollar.

I recently received an e-mail survey from the Senior Citizens League, a senior advocacy group. Out of curiosity I completed the survey so I could see all the questions. They are all leading questions all focused on getting more for seniors. 

What is not contained in the e-mail is reference to the financial status of Social Security and Medicare, the need to lower costs or increase FICA taxes or both.  As I read it, it is all about me, me, me. 

I think this effort is unfair to younger Americans and a bit selfish. Why do we seniors deserve more at the expense of younger Americans?

I find all this as disturbing as the movement to excerpt seniors from property taxes. 

HD is about being financially prudent, about preparing for retirement and other financial events when being a senior is real. I think readers reflect all that, but I suspect that is not reflecting the majority of seniors. 

Example survey questions:

Overall, how satisfied are you with the amount you receive from your monthly Social Security benefit check(s)?

The Social Security Cost-of-Living Adjustment (COLA) is 2.8 percent for 2026. Which of the following statements best describes how you feel about this COLA? (Fair, too low, too high).

How do you feel about the idea of guaranteeing a 3 percent minimum COLA for Social Security beneficiaries?

How do you feel about the proposal to eliminate ALL taxes on Social Security benefits?

Overall, how satisfied are you with the cost of your Medicare benefits? 

How do you feel about changing the COLA calculation to use an inflation index designed specifically to measure seniors' economic experiences?

How do you feel about the idea of the government issuing a senior stimulus payment?

The post Do seniors deserve more … at the expense of younger citizens? appeared first on HumbleDollar.

The other evening I looked at the clock for the fifth time: 3:26am. I just couldn't get to sleep. My mind was like a merry-go-round with different payment obligations occupying the funfair horses: wedding dress 1, wedding dress 2, vacation home property tax, a $10,000 down payment for a wedding reception here, an upcoming $6,000 payment for a summer trip there. They all revolved around my mind, and they all had one thing in common—an end of January payment date.

I've been retired for nearly a year, and up to now I've had no substantial expenses beyond the everyday costs of living a pretty frugal lifestyle. The specter of spending nearly $30,000 in a few days had really unsettled my normally sound sleeping pattern. It feels different than spending large sums when I was working, with a steady stream of monthly income getting deposited into the checking account.

Intellectually I knew I was worrying over nothing. More than enough cash is sitting in a combination of money market and immediate access savings accounts, but it's the high hurdle of pulling the spending trigger that robbed me of my ugly sleep. I even went as far as logging into my accounts the next morning to check the balances, like a child reaching for a comfort blanket and seeking reassurance.

I've learned something about my retirement self: I find large lumpy expenses disturbing, and I'm doubling down on keeping more cash than strictly necessary available for such situations. It might be a drag on my total returns, but it's a price I'm happy to pay for peace of mind. I can't imagine the stress some people must experience on a daily basis if they're constantly juggling payments and wondering if their nest egg is sufficient for the challenges ahead.

I'm grateful that throughout my career I prioritized saving for my future self and didn't commit to retirement until I had more than enough. A retirement living on just enough is definitely not for me. Now I just need to take a deep breath, gather my strength and get started paying the bills!

 

 

The post 3:26 AM: The Arithmetic of Anxiety (A Sleepless Night) appeared first on HumbleDollar.

🤑

For the 2026 AFC Championship game between the Broncos and Patriots in Denver on January 25, 2026, tickets are available from approximately $307 to over $1,000+ depending on seating. What they call VIVID seats are $30,000.WHO has that kind of money to spend on a football game? Apparently 76,000 people do. Oh yeah, parking is about $50.00I wonder if this counts as a emergency fund expense😁

The post Money to burn? appeared first on HumbleDollar.

I'm sure there's a few readers on Humble Dollar with a Scottish heritage and you might also be aware that tonight in Scotland, the air will be thick with the scent of haggis and the sound of bagpipes. It's Burns Night, the annual celebration of Robert Burns, Scotland’s national poet. While he's famous for "Auld Lang Syne," Burns wasn't just a romantic; he was known as a "Ploughman Poet" who knew the weight of debt and the grind of manual labor.

Burns famously noted in To a Mouse that "the best laid schemes o' mice an' men / Gang aft agley" (go often awry). It’s a reminder for any retiree. You can project a 7% return until you’re blue in the face, but life and the markets, much like the plow that upturned the mouse’s nest, rarely follows a straight line. The simple lesson? Build a plan that accounts for the "agley" moments, prioritizing liquidity and flexibility over rigid spreadsheets.

But why do we save at all? Burns captured the heart of the "being Financially Independent" mindset long before it had a name. In his Epistle to a Young Friend, he advised gathering wealth "not for to hide it in a hedge... but for the glorious privilege / Of being independent." Retirement, to my mind, isn't really about hoarding wealth for its own sake. It’s about buying back your time. That "glorious privilege" is the ability to wake up and own your day without a manager's input, the ultimate return on investment. The Bard called it a “glorious privilege”, modern terminology might use a more colorful acronym involving the letter F

If I stretch the meaning of one more of the poet's lines "it's no in wealth like Lon'on Bank / To purchase peace and rest." We can think of it like this: a massive nest egg is a tool, but it isn't the end of the road. Retirement success is better measured in "peace and rest", the quiet moments of peace and contentment with a hobby or interest that no stock index can track.

So there we go; if we squint hard enough, the 18th-century poet had a thing or two to say about 21st-century retirement planning. If you toast to the Bard tonight, perhaps you should aim for his own modest goal: to be 'contented wi' little, and canty wi' mair.' Happy Burns Night to the Scottish diaspora and enjoy figuring out the pronunciation and meaning of 18th century Scottish English!

 

 

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Every now and then I come across an idea that is immediately both interesting and "feels right". I recently came across one such idea in a podcast from Tim Hartford, his "Cautionary Tales" episode about Tony Hsieh, the billionaire CEO of Zappos. The concept is "obluiqity", that the best way to actually reach a goal is often to not focus directly upon that goal.

The term was coined by the economist Professor Sir John Kay, who noticed that often when companies had a focus purely on profit, they were not that profitable. Regularly they failed and were sold off or went bankrupt. However when a company focused on being outstanding at providing their particular product or service, they were often far more financially successful.

As Mr. Hartford explained the idea of obliquity, I could see it in so many aspects of my own life. I never had any ambitions during my 20 year career as an engineer. I just got out of bed every morning and did the very best I could that day. That lead to a pretty successful career. Then I set out to run a small business with my Dad. We both just fell into that situation, and we had no plans for growth or profitability. We just simply provided the best customer service we could each day. And that worked out pretty well also - better than either of us expected.

From a personal finance perspective, I was reflecting after a visit with our financial planner about how we ended up in our current situation. We never had a plan for retiring at any particular age or having a certain amount in our investments. But it all worked out OK. I really was a bit puzzled - "how did we end up here?".

I think that part of the answer is obliquity. We didn't think about any grand plan. We were just careful with our spending each and every day. We have had some good holidays (vacations!) and purchased some nice things. But our daily purchases have been simple and minimal. And every spare cent went to either paying down debt or increasing our investments.

I feel like obliquity explains some of my past and might help to inform my future. And I think it can provide some direction for many of us ... don't worry too much about a grand goal, just get up every day and do the best you can.

The post Success, from another angle appeared first on HumbleDollar.

Root canal, kaput refrigerator, major car repairs, expensive prescription, 🤑shopping cart dents your car😎

What do the above have in common? They can legitimately be called a financial emergency, and they can happen to retirees as well as anyone else. 

New research from the Center for Retirement Research (How Much Are Emergency Expenses for Retirees and Are They Prepared?) shows that the typical retired household spends 10 percent of income on unexpected expenses in a normal year.

Further, “two in five households lack the cash to cover such expenses for just one year. And one in five falls short even after including retirement savings.” 

“Retirees, tend to face larger spending shocks than workers, often driven by unpredictable costs such as healthcare. For that reason, retirees should consider holding three to six months’ worth of income in emergency savings,” according research by to J.P. Morgan.

I disagree that for those of us on Medicare, healthcare costs are a likely financial emergency. We can generally insure most of that.  Long-term care is an exception, but that is generally a cost over time. Even high prescription costs are now limited to $2100 a year and thus can be planned for - with some funds set aside. 

When our refrigerator froze its last leftover, it cost several thousand dollars to replace and we had to replace it quickly. I charged the cost to get 1.5% cash back and immediately paid the card balance from our  ash reserves. 

An emergency fund is not cash in the retirement account, it is outside retirement funds. We keep cash in our brokerage account, but also in our local bank account. But I admit, that cash is no where near 3-6 months of income. I think that amount should vary by the retirees income because many financial emergencies (such as a fridge) are not income related, with lower income retirees needing a larger reserve. What are your thoughts? 

We add to the cash fund each month and as it has turned out the last year, that was necessary just to replenish it. I think replenishing such funds as needed should come from your ongoing income stream regardless of how you create income. 

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After church service, I said hello to a fellow parishioner. I asked him, how are you doing. He replied, I’m fine, but I wish my friends would stop dying. I said nothing. Upon reflection, I should have replied, well you need to make new friends.

I retired early three and a half years ago at age 57. I spent my days going to the gym (lifting weights) and swimming (getting my cardio). I would say hi to a few folks, but they were mostly thirty second conversations.

Over time, my health and stamina improved. I was pretty happy. Then we went on our annual camping trip to Yosemite National Park. This time, my wife didn’t join me in hiking Yosemite Fall, a strenuous 6-10 hour hike. You start at Yosemite Valley, hike up, see the waterfall, then hike back down. I’ve done this before. Without my wife, I descended without taking adequate breaks. Plus, I started racing others going down. With my hiking sticks, I was moving fast. The next day, I noticed my knee hurting and swollen. First time ever. Turns out I tore my meniscus. Post surgery recovery was depressing. My knee was attached to an ice machine which limited my movement. Retirement didn’t look so good.

I re-started golfing with a longtime friend once a week. It was good to be reacquainted. I also met up with a former coworker. What did I learn? My golfing buddy and I were in a different space. He couldn’t leave his wife for more than a few hours (she wasn’t sick). So we were limited on where to golf. Money, which he had plenty of, was not the gating factor. It was time and commitment. It took me a long time to accept this. Once I did, I looked for other partners, social opportunities. My former coworker? After two lunches, we realized we were incompatible, and like in dating, moved on.

Fast forward to today, and I am a member of a men’s group whose mission is for members to be social (by taking part in various club activities like golf, hiking, lane bowling, book club, etc). The club’s median age is 79. But these men are much fitter and more active compared to most men, at any age. I aspire to be like these men. I am president of the men’s group for our church. We have monthly dinners and two annual parish-wide events. Being a leader pushes me out of my comfort zone, and it’s a great way to meet people. I started a 9-hole men’s golf group within our church. We play weekly and have a beer/snack afterwards. We also watch baseball games, or go to San Francisco to be local tourists. I’ve gotten to know these men at a much deeper level; before we were casual acquaintances. Our wives got in on the fun, and we go on various musical performances. My social circle is much bigger now compared to when I was working. Oh, I rarely see my former coworkers.

What’s next? I think I need to exercise my brain more. I don’t know what this means exactly. We’ll see.

The post Being Social appeared first on HumbleDollar.

I've never seen this in any financial column anywhere:

I've told all my kids and anyone else who'll listen to setup a HELOC on their home "just in case". You never know when you'll need cash, like when you've lost your job, and if you ARE jobless you won't be ABLE to get a HELOC.

Notice I didn't say Home Equity Loan. There is a difference between the two. I won't go into that here, you can research that yourself.

A HELOC is a MUCH cheaper way to borrow money than using a credit card or a car title loan AND it costs you nothing to setup and keep "on the shelf".

Another resource is to setup a whole life insurance policy but only with a non-direct recognition MUTUAL company.  They buildup cash valve fast that you can use for emergencies if needed.  If you research "infinite banking" you can learn about this.

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