February 2020 Best of the Web

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We have a great collection of content to share with you this month. We start by continuing the conversation on topics we just wrote about this month: the challenge of keeping health care costs affordable and better understanding annuities.

The BestWe also return to some older ideas that we’ve explored on the blog before: the challenge of caring for aging parents and designing a better lifestyle sooner rather than focusing on a traditional retirement.

Retirement planning is complex, with so many financial and personal topics to consider. We found a couple articles this month to help you focus on the key things that will move the needle and help you avoid wasting time on things that will not.

We close with articles that challenge conventional wisdom that many of us hold. Will they change your strategies and ways of thinking?

Enjoy the articles and have a great month!

Continuing the Conversation

This month we published a comprehensive guide to early retirement health insurance options. Unfortunately, obtaining affordable insurance is only one part of controlling medical costs in our broken American health care system.

Susan Gubar writes The Financial Toxicity of Illness.

Julie Appleby shares One Defensive Strategy Against Surprise Medical Bills: Set Your Own Terms.

We also published a framework for understanding annuities earlier this month. Things are constantly changing.

Mike Piper asks and answers the question Inflation-Adjusted Annuities No Longer Available: Now What?

Last summer, I reviewed Cameron Huddleston’s book Mom and Dad We Need to Talk about caring for your aging parents. This month Huddleston was part of a panel with other friends of the blog Steve Chen, Doug Nordman, and Jen Smith on the What’s Up Next? Podcast for an interesting conversation about The Problem With Looking Out For Mom and Dad.

Creating Better Retirement Conversations

Carolyn McClanahan thinks financial planning should address current life satisfaction while creating resilience for an unpredictable future, writing It’s time to change the retirement planning conversation.

Joe Casey shares keen insights that should be considered by anyone considering retirement, writing Lessons from Kobe Bryant’s Life After Retirement.

Traditionally, life revolves around work during our best years as we save for retirement in our 60’s or 70’s. We’re pushing the conversation toward using your growing financial independence as an opportunity to design a better lifestyle far sooner. This can include work you enjoy that fits into that lifestyle. Kristen at Barefoot Theory shares 20 Remote Jobs For Van Lifers and Travelers.

What Matters, What Doesn’t?

Jonathan Clements shares key lessons accumulated over a lifetime about what actually moves the needle with your finances, writing Nobody Told Me.

What matters to arguably the greatest investor ever? Warren Buffett tells you for free in his most recent letter to the Shareholders of Berkshire Hathaway. 

A topic I’ve seen written about lately is asset location in the context of a low interest rate environment. Karsten Jeske shows you can’t squeeze much money out of this tax arbitrage, writing Asset Location: Do Bonds Really Belong in Retirement Accounts? 

Some things we simply can’t know, like the optimal way to build an investment portfolio. Still, I enjoyed the conversation between two reputable guys, with differing opinions, who are doing their honest best to help investors figure it out when Paul Merriman talked with Rick Ferri on the Bogleheads on Investing Podcast.

Things to Ponder

I’ll close out with a few interesting articles that challenged conventional wisdom and made me think.

Thomas Waschenfelder writes Here’s Why Selfishness Is Actually Good For You.

ESI Money thinks one of the greatest gifts we can give is The Gift of the Struggle.

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[Chris Mamula used principles of traditional retirement planning, combined with creative lifestyle design, to retire from a career as a physical therapist at age 41. After poor experiences with the financial industry early in his professional life, he educated himself on investing and tax planning. Now he draws on his experience to write about wealth building, DIY investing, financial planning, early retirement, and lifestyle design at Can I Retire Yet? Chris has been featured on MarketWatch, Morningstar, U.S. News & World Report, and Business Insider. He is also the primary author of the book Choose FI: Your Blueprint to Financial Independence. You can reach him at chris@caniretireyet.com.]

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4 Comments

  1. Thanks for including the post by Jonathan Clements. I was hooked with his very first point about his house. We bought our house in the late 90’s. We were urged to purchase a larger home by the mortgage company because we could afford it. However, we decided to purchase a more modest house that we could pay for with just one salary should anything happen to one of our jobs,

    It was the best financial decision. It allowed my wife to go part-time when our kids were young. It allowed us to contribute to 401ks, 529s and investment accounts along the way. Other friends who stretched to purchase the largest house possible struggled to do the same, Their retirement accounts aren’t nearly funded enough and their kids are now saddled with student loans.

    Nobody told us to buy below our means but I’ll sure be telling my kids when they start looking for their first house.

    1. Agree 100% Mr. P2F. Similar decision with similar results in our household. If you get even just a few of the big things right (education, housing, transportation, food, taxes, investment fees) you will be so much further than your peers in 5-10 years. Too many people are looking for complex solutions for problems that are very simple at their core.

  2. The Paul Merriman & Rick Ferri investing podcast mentioned market timing. PM is an advocate of simple 100-150 moving average signal to go to safe investments and vice versa. It was important for retirees to have this safe guard. What are your thoughts?

    1. I do not incorporate market timing, but I think Merriman’s thought process is interesting. My take home is that volatility is potentially a much bigger deal to those drawing down investments than those in the accumulation phase. However, market timing is only one way to deal with it (and IMO, not a great one for most investors).

      Other things that I am doing or would do before any market timing strategy would include, but are not limited to: Lower your withdrawal rate. Make sure necessary costs (housing, transport, food, med insurance, etc.) are covered by SS and annuities and then you can be more aggressive with the remainder of your portfolio without the volatility risk in a worst case scenario. Have a portion of your portfolio in non-market assets that aren’t directly correlated to the public markets (privately owned real estate, private business). Do some, or at least be willing to do some, paid work that you enjoy in retirement.

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