March 2018–Best of the Web
March is supposed to come in like a lion and go out like a lamb. As the month winds down, neither weather or financial markets are looking docile. Each is a great excuse to grab a hot cup of coffee, get in your most comfortable chair, and explore our selection of the best articles from around the web to help you save more, invest smarter, and retire sooner.
This month’s selections cover diverse topics. We start with big issues facing a retiree. First, we look at how to maximize retirement income. Then, we explore a health insurance alternative for early retirees.
The articles also question conventional wisdom on a variety of issues ranging from market valuations, use of tax-deferred retirement accounts, the idea that your home is an investment, and what it really means to retire early. Finally, we’ll explore why it is so vital to answer the question “Can I retire yet?” correctly.
Let’s dive in to the articles….
Increasing Retirement Income
Mike Piper reviewed some of the best research on retirement spending strategies and summarized it succinctly. Is it “An Ideal Retirement Spending Strategy?”
Understanding Health Sharing Ministries
From Kitces.com, Jake Thorkildsen explains how health sharing ministries differ from health insurance and provides a thorough comparison of the four major health sharing ministries with “How Healthcare Sharing Programs Compare To Traditional Health Insurance.”
Questioning Conventional Wisdom
Last month’s round-up explored managing risks in the face of overvalued markets. This month, Mark Jimenez says we need to question whether the stock market is overvalued. He writes “Stocks Are Too High?”
JD Roth questions conventional wisdom about how to determine how much money you need to retire. He says, “Traditional Advice is Wrong: Here’s How Much You Actually Need to Save for Retirement.”
Tax Deferred Investing for Early Retirement
Jim Dahle debunked conventional wisdom that those saving for early retirement should bypass the 401(k) and favor taxable investments with “Early Retirees Should Max Out Retirement Accounts.”
Jeremy, of Go Curry Cracker, has long been a proponent of contributing as much as possible in tax-deferred investment accounts as the first step to legally avoid income taxes. However, he’s now wrestling with the question “Is Your 401(k) Too Big?” as he ponders required minimum distributions.
Your Home as an Investment
The rent vs. buy decision is a never ending debate where there is no consensus on conventional wisdom. Mainstream financial advice says a home is a great investment. Contrarian thinkers think it’s a horrible investment.
A contrarian among contrarians, Big ERN writes, “My Best Investment Ever: Homeownership?!” I question how universally applicable ERN’s example of owning in San Francisco is. We’re preparing to put our house on the market in western PA, where we’ve experienced no appreciation in twelve years of home ownership. Still, it’s a fascinating read and sheds light on different characteristics of an investment and benefits of home ownership.
Wherever you fall on the buy vs. rent argument, Mark Trautman teaches how not to treat your home as an investment. He writes, “Who Let that Lifestyle Creep In?”
Update on HSA Contributions
Since I published a post this month about the best place to invest an HSA, the IRS decreased the contribution limits for 2018 by $50. The Lively blog explains the rule changes and what to do if you’ve already contributed too much by contributing the previously published maximum.
Redefining FIRE
I often write about redefining retirement. Harry Sit shares a similar point of view, but thinks what many who write about FIRE (financially independent, retire early) call early retirement is not retirement at all. Instead he calls it a career pivot with “Financially Comfortable and Pivot.”
Whether we call it early retirement or a pivot, Tanja Hester thinks all of us who write about FIRE have an obligation to tell our story with transparency. She created a stir around the internet writing “What FIRE Bloggers Owe Readers // A Blogging Manifesto.” She makes a key point that all of us who write about this topic have a responsibility to not trivialize the retirement decision.
The Delicate Balance
A theme we try to emphasize on this blog is finding the balance of living for today while planning for tomorrow. It can be easy to get trapped in “one more year” syndrome while missing out on life. On the other hand, it can also be tempting to jump into retirement too quickly without proper preparation.
My original motivation to pursue financial independence was having more time and freedom to pursue my passions in the outdoors; skiing, climbing, and mountaineering. I discussed this in an interview at Keep Thrifty.
I romanticized those choosing to live for today, pursuing “dirtbag” climber or “ski-bum” lifestyles. Retirement itself is often over-romanticized as a solution to our problems. Ultimately, I understood the importance of financial security those chasing their passion more agressively often lacked.
Kelley McMillan, of National Geographic, asked “Why Are Ski Towns Seeing More Suicides?” One of the factors cited was economic challenges faced by residents with little income, savings, or Social Security in these seemingly idyllic areas.
This article resonated with me. It made me appreciate my choice to find balance between saving aggressively to escape a standard lifestyle at a young age, while delaying gratification enough to pursue financial security first.
“Can I retire yet?” is a complex question without a single right or wrong answer. It’s always a balance of risk and reward. This is something we all need to seriously consider when making the retirement decision.
[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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