February 2022 Best of the Web

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Resources this month cover a wide variety of important topics. News continues to develop by the hour in Europe. We take a look at what the stock market has done historically in times of war.

The Best

Retirement income is always a popular topic among readers. Articles explore why the 4% rule may still be valid despite current high stock valuations and low interest rates, and whether changes to required minimum distribution rules will impact you. We also explore the important topic of asset location. It impacts how much you ultimately have to spend in retirement after the government takes their share in taxes.

I share a thought provoking perspective on using debt in retirement that’s very different than my own. Other articles present varying perspectives on Modern Monetary Theory.

Finally, we discuss how you can make better decisions that will minimize regrets. Dive in and then let me know what resonates with you.

Markets During Wartime

I use social media primarily to stay abreast of what is happening in the personal finance space. In the past week since Russia invaded Ukraine I’ve noticed two frequent themes.

One group of people express excitement for market drops as “buying opportunities.” The idea of publicly rooting for bad things to happen so you can profit is gross. Not to mention it is a form of market timing which is rarely effective.

On the other side, virtue signalers say that with such terrible things happening in the world, it is wrong to worry about money and our own financial interests. This viewpoint assumes we can’t hold two complex ideas in our head at the same time, when in reality that is exactly what we must do all of the time in order to be successful investors.

Markets go up and down, often in unpredictable ways, in response to events that harm many people. We’ll have to make decisions to stay invested (or not) through wars, social unrest, pandemics, natural disasters, etc.

It is important to make informed rational decisions. Ben Carlson helps us do so, writing The Stock Market is Heartless.

Retirement Income

I recently shared Morningstar’s research on safe withdrawal rates. Ben Henry-Moreland presents a thoughtful rebuttal on the Nerd’s Eye View blog: Why High Equity Valuations and Low Bond Yields Won’t (Necessarily) Break the 4% Rule.

Required minimum distributions are changing to reflect longer life expectancies. Jeffrey Levine shares 3 Reasons The New RMD Tables For 2022 (And Beyond) Are Overrated.

A Different Perspective on Debt

When writing, I try to be transparent when expressing my points of view. However, personal finance is personal. What works for me may not be right for you. I enjoy using these round-up posts to share different perspectives.

I often share my debt aversion. Jeremy at Go Curry Cracker shares a far different approach to using debt in retirement, writing Sweet, Sweet, Debt

Modern Monetary Theory and Inflation

Last year I used Stephanie Kelton’s book about modern monetary theory to broaden my knowledge of macroeconomics and help make sense of the massive government spending that occurred in response to the pandemic. 

I’m not the only one interested in this topic. That blog post was the most read on the site last year. The next two articles present different viewpoints on whether all that spending was worth it.

Jeanna Smialek asks Is This What Winning Looks Like?

Cullen Roche writes MMT Failed Its First Big Inflation Test.

Asset Location

I communicate with many people who get hung up on the minutiae of asset allocation. They are in search of the “optimal mix” of stocks and bonds in a portfolio, when the best any of us can do with imperfect information is an allocation that is “good enough.”

Conversely, asset location gets relatively little attention. This is a shame. Gaining an understanding of how investments are taxed and optimizing for that is a better use of our time. The next two articles address this important topic.

Christine Benz writes Which Investments to Keep Out of Your Taxable Account.

James Dahle writes 4 Lessons from the Vanguard Target Retirement Long Term Capital Gains Distribution Disaster.

Regrets, I’ve Had a Few….

Retirement is one of the biggest decisions of your life. Work too long, and your future self may regret missing out on years of life experiences that you can’t get back. Leave too early, and your future self may feel boxed in and regret not having more money and options that money could provide.

In his new book, The Power of Regret: How Looking Backward Moves Us Forward, Daniel Pink examines the biggest regrets in life of people from a wide range of demographics. It is a fascinating, short, easy read. I highly recommend this book for the perspective it provides to anyone interested in making better decisions.

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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. After achieving financial independence, Chris began writing about wealth building, DIY investing, financial planning, early retirement, and lifestyle design at Can I Retire Yet? He is also the primary author of the book Choose FI: Your Blueprint to Financial Independence. Chris also does financial planning with individuals and couples at Abundo Wealth, a low-cost, advice-only financial planning firm with the mission of making quality financial advice available to populations for whom it was previously inaccessible. Chris has been featured on MarketWatch, Morningstar, U.S. News & World Report, and Business Insider. He has spoken at events including the Bogleheads and the American Institute of Certified Public Accountants annual conferences. Blog inquiries can be sent to chris@caniretireyet.com. Financial planning inquiries can be sent to chris@abundowealth.com]

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  1. Great point about asset allocation. It’s probably more critical in retirement to hold the right type of investment in the right type of account. This is why last year I moved Stock Index Funds out of our IRAs and ramped up our REIT allocations instead. It’s not a huge deal, but provides some solid tax savings and stages off unexpected distribution problems.

  2. I wrote, deleted, re-wrote, re-deleted a few times. Suffice it to say I was surprised by the use of “Virtue Signalers” in this context. That terms implies an insincerity about whatever the topic is, but a desire to be viewed a certain way. I don’t think that term applies here.

    1. Eileen,

      Maybe I should have put more thought into my choice of words. The point I was trying to express, and may not have done so very well, is that many people expressing that viewpoint were essentially shaming anyone who was concerned about their own personal finances. It is natural to be concerned and fearful about your own interests, even as you simultaneously feel terrible for the reason that markets are in chaos. The shaming is unnecessary and unhelpful.

      Thanks for reading and providing the constructive feedback.


      1. I got what you mean. Plenty of people saying one thing and not doing anything positive about that one thing they are saying.

        It’s just human nature. Chris, did you get my email I sent a while back?


  3. I completely concur with the grossness of people who express the joy about the weakness in the markets due to a real war. Quite a few of them flaunt the famous note of Warren Buffet that it’s time to invest when the blood is in the streets. I personally (and some investors with higher morals) don’t think Warren alluded to that kind of blood.
    If the nuclear war isn’t imminent yet (we saw it mentioned a few times over the weekend), yes, our financial assets are also important and both thoughts can be balanced even though it does feel a bit hypocritical to me, but it’s important to me because it makes easier to make donations.
    Nowadays when I read investors and PF centric people discussing money and about money only, I think about how obscenely obsessed they are with it and to the point that they cannot see other people’s pain. None of them and I mean totally none of them mentioned that instead of investing a hundred or two or three hundred dollars to get a cheap share of a stock or MF, they’ll give money to charity that helps war victims. Considering how much clout PF websites have, wouldn’t it be nice if some would donate some of the blog income or their cash and mention on the blog and even encourage their readers to consider doing the same? It would be a nice gesture of humanity, IMHO, but what do I know maybe it’s not acceptable. Yes, they talk about donor funds and similar things and how they help with their tax situation, etc., so again charity through that money angle and not because they felts in their heart it was the right thing to do. So, it’s kind of sad.

  4. I tried to read Jeremy’s piece (Sweet, Sweet Debt) with an open mind but, apparently, I failed. The thought of funding living expenses via debt just put a knot in my stomach, and it’s not even my debt. I understand the numbers he presented, but I disagree, respectfully, with the statement that you maintain complete control of the underlying assests. If, by “underlying assets,” he means the assets on which liens were placed to secure the loan, the control is general operating control, not complete and technical control. Freedom to sell that asset is relinquished for the duration of the loan – unless your intent is to pay off the loan early. While I can see how this plan could work for some people in some situations, my debt adverse mindset wouldn’t allow me to consider funding everyday living expenses with debt. To each his own. If I’m missing something, please let me know.

    1. My approach is in line with your own Mary. As noted, I like to use these posts to share different perspectives. I thought his was interesting, but like you it is not for me.


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