Are Bonds Predicting a Recession?

"It's difficult to make predictions, especially about the future." ~ Yogi Berra

Last week, all my bonds and bond mutual funds. increased in value.  I thought that was strange since the 30 year bond increased to almost a 5% yield , which means bond prices are falling, when the courts ruled against the tariffs.  However, later that week, the jobs numbers were poor, causing investors to worry about a possible recession, and in turn flocked to the safety of U.S. bonds. 

Do I know which direction the stock market is heading?  LOL, no! I'm just speculating base on the data that is available to me.   In reality, if I knew what is going to happen, I wouldn't be blogging about it.  I would just quietly YOLO and make millions.

Personally, with U.S. Debt at all time highs and rising, with Student Loan, Auto and Mortgage defaults increasing, and Credit Card debt at an all time high, I don't feel the economy and the stock market can continue doing well. So, I will take a path of being cautiously risk averse.  I'm reducing our equity and bond investments and putting funds in short term money markets. Yes, I may miss out on significant gains if the market continues to only go up.    At the same time, I won't feel as much pain if the market declines significantly.

GLTA, which ever way you believe the economy and stock market are headed.

For more on New Beginnings, check back every Sunday for a new segment.

This is not financial nor investing advice. Please consult a professional advisor.

Copyright © 2025 Achievement Catalyst, LLC

Become One of the Millionaires

There are about 25 million adult millionaires in the U.S. out of 258 million adults in 2025.  About 10%.   When I was a kid in 1965, there were about 100,000 millionaires out of 140 million adults. About 0.7%.

When I was a kid, I probably never met a millionaire.   Nowadays, if I meet 10 random adults, it is likely that one is a millionaire.

In 2008, I posted on How to Become a Millionaire.  This is not a get rich scheme.  It requires disciplined saving, compounding interest, and at least a 4% return on the funds.  And it can still work today.

Of course, YMMV.

For more on  Reflections and Musings, check back every  Saturday for a new segment.

This is not financial, saving, or becoming a millionaire advice. Please consult a professional advisor.

Copyright © 2025 Achievement Catalyst, LLC

Early Retirement DIY Resource

In 2009, I posted Early Retirement Forum which highlighted the Earlyretirement.org website.  Earlyretirment.org has many posters that are DIYers who are confident of retiring early or have retired early.  This differs from many Internet articles that are biased towards people unsure or unable to retire early, 

Since I looked in 2009, the website provides a link to a calculator that estimates success rate.  Most financial advisors use a Monte Carlo analysis to determine success probability.  Firecalc uses rolling periods from 1871 to estimate success if one had lived in that period.  I like this methodology approach since it includes long decline periods such as the Great Depression.

Finally, a commenter on my post shared additional links that may help provide perspective on early retirement.

Disclosure: I am not affiliated with and receive no compensation for any referrals in this post on any My Wealth Builder posts.

For more on Reaping the Rewards, check back every Friday for a new segment.

This is not financial nor early retirement advice. Please consult a professional advisor.

Copyright © 2025 Achievement Catalyst, LLC

Rising Cost of a College Education

I found this 2019 article on college costs: You Won’t Believe How Much College Costs Have Jumped in the Past 50 Years

The article states costs have gone up 31X from 1969 to 2019, or a little over 7% average per year for 50 years.   Based on the numbers shared, I assume costs shown are only for yearly tuition/fees and do not include room and board. The article includes a table of average college costs from the article through 2019.

For more on Crossing Generations, check back every Thursday  for a new segment.

This is not financial nor education advice. Please consult a professional advisor.

Copyright © 2025 Achievement Catalyst, LLC

Be Ready for a Stock Market Decline

Spoiler Alert: This post is about managing risk, not timing the market. 

The worst time for a market decline:  Three to five years before and three to five years after the date of retirement or paying for college, when saved funds need to be withdrawn.

True story:   I retired in 2007 at the peak of the stock market.  My neighbor's son started college in 2008.  Both of us were highly invested in the stock market.  Then the Great Financial Crisis of 08/09 happened and poof it was gone.   We both managed to make it through the financial crisis, but it was stressful.

How to be ready:  Put enough funds in fixed interest or money markets three to five years before retirement or paying for college to cover the amount needed for three to five years after retirement or paying for college.  Therefore, survive any short term decline.

The best time for a market decline:  When one still has 30-40 years before needing the funds and can wait for a recovery before using the funds.

How to be ready:  Add more money during significant declines.   Since 1950, the market has had 35 declines of 10% or more.  In all 35 instances, the market passed the previous highs.  Sometimes within a few weeks, other times a few months, and in a couple cases a few years.  But the recovery happened 100% of the time. 

Success is all about risk management on when the funds are needed.

For more on The Practice of Personal Finance, check back every Wednesday for a new segment.

This is not financial nor investment advice. Please consult a professional advisor.

Copyright © 2025 Achievement Catalyst, LLC

Turbocharge 529 Plan Contributions

Here's a hack I found that can increase your tax deductible contributions to a state supported 529 plan.  

In my state, contributions to the state 529 plan are deductible on a state tax return.  We started contributing the maximum to my daughter's account the year she arrived.  Unfortunately, this amount, even if contributed every year, would not cover her college expenses.    However, I realized that 529 plans could be opened for us, the parents, which enabled us to triple our tax deductible contributions, which tripled the amount of tax exempt earnings. 

In the future, we could transfer the funds to our daughter's account, avoiding tax consequence, if we kept the amount below the annual gift exemption.   Thus, each parent can transfer up to the maximum gift tax exemption ($19,000 in 2025) each year per child.

If there is money after college, the beneficiary can use up to $35,000 to contribute to a Roth IRA account.

Terrific benefits of contributing a 529 College savings plan.  Use the hack above to contribute, deduct, and earn even more than just contributing to the child's account.

For more on Ideas You Can Use , check back every Tuesday for a new segment.

This is not financial, tax, saving, 529 plan advice. Please consult a professional advisor.

Copyright © 2025 Achievement Catalyst, LLC

Wills and Trusts

According to a 2024 survey only 32% of people have a will or trust.  

The other 68% leave it to their state to manage their estate and distribute their assets.   IMHO, this is a risky proposition.  The state will put the estate in probate, assign an administrator, assign a guardian if needed, and follow intestate rules.   This may be a costly, lengthy (due to conflicts with potential heirs), and different from the wishes of the decedent.  

Even if one has a will a trust, it needs to reviewed periodically to ensure it still current and follows one wishes.  Changes such as births, deaths, divorce, marriage, child becoming adult will affect wills and trusts.   Also, circumstances may change who one chooses to be executor, trustee, or guardian. Typically, it is recommended to review about every five years, to determine if laws or circumstances have changed.

A trust does require extra effort of titling assets in the name of the trust to be effective.  For example, a house has to owned by the John Doe Trust, not just John Doe.  However, a good estate plan will have a pour over will, which transfers assets to the trust before probate, and therefore, avoids probate.

Finally, I've noticed that trusts have become much more complex in the past few years given the changes in estate laws on exemptions from income tax.  IMHO, having a attorney at a larger estate planning law firm to account for all the latest nuances/changes is worth doing.  

For more on Strategies and Plans, check back every Monday for a new segment.

This is not financial nor estate planning advice. Please consult a professional advisor.

Copyright © 2025 Achievement Catalyst, LLC

Changing My Expectation of Financial Advisors

In the beginning, I looked for financial advisors to offer me products that I couldn't get on my own or products that I wasn't aware of yet.  The first brokerage financial advisor I worked with gave me access to stock investment firms at a significantly reduced cost, 1% of AUM instead of 3% AUM if I went there on my own.  This enabled me to invest with well known investment firms at much lower costs and much lower initial investment amounts.  Some of the major brokerage firms have followed with this model, and some also offer doing privileged internal recommendation. 

Other non-brokerage investment advisors offered different products such as annuities, guaranteed index ETFs,  and other similar products.  Many of these products I evaluated and didn't have much interest either because of fees or risks.

In most cases, financial advisors have developed their own "standard" methodology that they advocate.  I understand the reason for doing that.  It gives them focus on specific expertise and scale for their business for providing financial services.  However, many times the methodology is limited in financial scope or services.

I now have a new expectation of financial advisors.   I want an advisor to tailor their services and recommendations to my specific situation.  I still want them to present investment opportunities that I am not aware of.  However, I want them to be able to enable management of our investments as I would do them.   I also want to do this at reasonably low cost and without committing the majority of our funds to be under the direction.

I started search for "Financial Concierge" on Google.  Most the response were vague about depth of services provided and didn't provide any costs or required funds to be undermanagement.  None shared the cost of such services.  The information sounded like the services and costs for people with much more funds than us.

Luckily, I did come across one brokerage firm that claim to have such services and offers a free consultation.  Since I already have funds at the firm, I plan to schedule an appointment with them to discuss what is offered and the costs.

For more on  New Beginnings, check back every Sunday for a new segment.

This is not financial nor advisor advice. Please consult a professional advisor.

Copyright © 2025 Achievement Catalyst, LLC

Challenges to Becoming Wealthy

IMHO, here are some challenges to creating personal wealth:

More Time Needed - Time is one of the major factors in creating wealth. Saving and investing over a long period of time always works. Some people just haven't had the time they need for their plans to work. Some are in the 20s and 30s and some started later in their 40s. However, if they continue with their plans they will become wealthy. Many people are in this category I wish them good fortune on their personal finance journey to success. Remember, for most of us, wealth building is a marathon, not a sprint.

Lack Discipline/Commitment - Many people understand what needs to be done. However, only some are willing to , able to or committed to do it. For example, an activity that is guaranteed to work is to save 10% of one's income. It is guaranteed to work, whether one makes $10,000 or $100,000 per year. Saving only $1 per day can create over $500,000 in 50 years at a 10% return (average yearly return of the stock market since 1926). Imagine what saving 10% of one's income can do.

However, there are many reasons people give for not being able to save 10% of one's income. The reasons include:

Would require too much sacrifice.

Can't afford 10% after all "necessary" expenses.

Too much debt.

Don't make enough money.

We really "need" to drive a new car or live in a more expensive house.

Can't get a higher paying job.

Yes and ..... I submit it's a choice. Decide yes, and one will likely become wealthy. Give in to the "reasons", and one may never become wealthy.

Need a Better Strategy - Having a good plan to build wealth is important. Good plans have a higher probability of success than poor plans. As example of a good plan is to pay oneself first. In my opinion, a poor plan is one a former colleague used - increase one's standard of living by maxing out credit cards, and then make the minimum payment forever. The majority of plans and tactics shared are good ones. However, it is important to know that some plans won't work.

Here is my own personal wealth building strategy which I believe is a good one:-).

Had a Disastrous Event - Even the best plans can be derailed by outside influences. Job loss and health issues can be major negative impacts to wealth building. Even a temporary job loss or temporary illness can significantly reduce one's wealth. I know some people have had this happen to them. Getting back on track is generally a difficult and long task.

We have been fortunate so far and have avoided any disastrous events. While I can't prevent a disastrous event, I make contingency plans in case such an event happens. My contingency plans include an emergency fund of a year's income and comprehensive insurance coverage.

That's my personal assessment of why we're not all wealthy yet. In my opinion, many of the "more time" group will likely succeed and become wealthy someday. Most of other three groups will try valiantly ... and only a few will succeed.

For more on Reflections and Musings, check back every Saturday for a new segment.

This is not financial nor wealth building advice. Please consult a professional advisor.

Copyright © 2025 Achievement Catalyst, LLC

Sale and Coupon Fatigue

For most of my life, I was a coupon and sale seeker.  Before I would purchase an item, I would wait for it to go on sale or have a coupon, even for small purchases.  Many times, I would organize my purchases around sales and coupons.   However, this caused more planning and complexity, which I managed easily when I was younger.

Even after retirement, I was still a coupon and sale seeker for most items.  As I'm getting older, the planning and complexity is becoming more difficult and I am choosing to simplify.   Now I just buy my smaller items whenever I need them.  If they happen to be on sale, great I might buy a few extra.  

I will use my sale and coupon efforts for larger purchases, for example appliances and automobile, where the effort yield large savings, and are done infrequently.   

Doing this should create more simplicity for my retirement lifestyle.

For more on Reaping the Rewards, check back every Friday for a new segment.

This is not financial nor advice. Please consult a professional advisor.

Copyright © 2025 Achievement Catalyst, LLC

Use Custodial Accounts to Make Dividends/Interest Tax Free

Here's a hack to reduce taxes on interest and dividends earned for the family.   Put the assets in a custodial account for a minor dependent.  In 2025, the first $1350 of a minor dependent's unearned income in 0%.   Unearned income includes dividends, interest, and capital gains.  There are other ones, like IRA distributions, rents and royalties, but probably not relevant for most dependents.

$27,000 earning 5% interest is $1350 annually, which is tax free if earned in a dependent's custodial account.   No tax return needs to filed if unearned income is less that $1350.

The only requirement is all the funds in a custodial account must be used for the benefit of the dependent.  However, that is easily done.  Funds withdrawn can be used for the dependent's allowance or the fractional part of their rent, food, clothing, education expenses.  Therefore, the interest/dividends earned can be easily withdrawn and spent on an annual basis to comply with IRS regulations regarding custodial accounts.

For more on Crossing Generations, check back every  Thursday for a new segment.

This is not financial nor tax advice. Please consult a professional advisor.

Copyright © 2025 Achievement Catalyst, LLC

Maximize Taxable Retiree Income in 12% Bracket

IMHO, the 12% tax bracket is a sweet spot for taxable retiree income.  As a retiree, I could partially manage whether to receive taxable income or not.

Here was my thinking:

• 12% is a terrifically low tax bracket. For reference, I was in the 30% tax bracket at an entry level salary when I first started working in the early 80s.  This tax bracket will be available at least until 2030.
  
  
• The next bracket is 22% which means almost a 100% increase in one's marginal tax rate. If future income can be pulled forward  to the 12% tax bracket and avoid being in the 22% tax bracket in the future, that is a tremendous savings.
  
  

Here are some examples to take advantage for this "tax bracket arbitrage:"

• Do a Roth conversion, especially if one has traditional IRA accounts that will have current or future RMDs that may put one in the 22% tax bracket.  This will allow retirement investments to continue to grow tax free and pay 0% taxes when withdrawn in the future.
  
  
• Realizing long term capital gains that will be taxed at 0% instead of 15% or higher in the future.


• Invest in ETFs or stocks that pay qualified dividends that will be taxed at 0% instead of 15% or higher in the future.
  

Paying 0% or 12% tax on income now is definitely better than paying 15% or 22% in the future on the same income.

For more on The Practice of Personal Finance, check back every Wednesday for a new segment.

This is not financial nor tax advice. Please consult a professional advisor.

Copyright © 2025 Achievement Catalyst, LLC

Benefit of Paying Credit Card Balance Every Week

I've started to pay several of our credit cards every week, before the bill is sent.   I do this because I share 3-4 credit cards with family members.   Since I don't know what they are spending, I check periodically to see the balance on the card, so that I will have enough funds to pay the monthly bill.

Since I check the bill, I decided I might as well pay the balance, even though it is not due yet.  That way I don't forget or miss paying a large bill when it comes.  In addition, I am effectively spending on a cash basis, since I pay the balance every week.

Paying the balance weekly may also increase one's credit score since the percent utilization is lower when the monthly bill is issued.  Bonus!

For more on Ideas You Can Use, check back every Tuesday for a new segment.

This is not financial nor credit card advice. Please consult a professional advisor.

Copyright © 2025 Achievement Catalyst, LLC

My New Strategy for Investing During Market Declines

I read an article that stated since 1950, the market has had 35 declines of 10% or more.  In all 35 instances, the market passed the previous highs.  Sometimes within a few weeks, other times a few months, and in a couple cases a few years.  But the recovery happened 100% of the time.  I would include a link to the article, but I can no longer find it.

Of course, one issue is timing.  If it takes 5 or 10 years to recover, it may be challenging for those who have no other source of income.   A second issue is stock risk.   Inevitably, some stocks keep going down after a 10% decline and don't recover to new highs. A third issue is the decline may continue past 10% to 20-40% as it has in the past.   It seems to be a no brainer decision to invest something, if one has time and other sources of income.

Here's my plan for the next 10% decline:

• In retirement accounts, invest up to 50% of cash available.  These funds won't be needed for the next 5 years of living expenses.
• Scale in the investments.  For example, 10% of funds at 10% decline, additional 20% at 15% decline, 25% at 20% decline (bear market).
• Invest in market index ETFs instead of individual stocks.  My current choices are VOO (S&P 500 index) and MGK (Large Cap Growth Stock index.)
• Buy and mostly hold.  I will evaluate some options for scaling out gains in the future.

For reference, I feel the market is extremely high and a correction is inevitable, but who knows when.  However, I do know that it will be difficult to invest new money when the market declines.   Hopefully, I will be disciplined and follow this plan.

For more on Strategies and Plans, check back every Monday for a new segment.

This is not financial nor investing advice. Please consult a professional advisor.

Copyright © 2025 Achievement Catalyst, LLC

Financial Strategies that Helped Me

Here are some simple financial strategies that have worked for us and I'm sharing with my kids.

• Pay yourself first.   Put 5, 10, 15% or whatever into a savings account.  When I first started working, I would pay all my bills and expenses first and whatever was left at the end of the month was my savings.   Except for my first month of working, I was pretty good at having something left at the end of the month.   Later, I realized a better approach would be to take out my savings first, and then pay my bills and spend on expenses afterwards.
• Buy only what we need.  Marketers are adept at getting consumer to buy stuff.  The challenge to sort the needs from the wants.   Do I really need the best smart phone, cable TV, a large screen TV or a luxury car?  The answer is probably not.  Not buying these can reduce spending by hundreds of dollars one time or every month.  A related rule to this is to live below our means.
• Spend cash for everyday expenses. Using only cash is an easy way to limit spending.  Once the cash runs out, the spending stops.  A corollary to this is pay off entire credit card bill due every month.

OK, not everyone can follow these strategies.  But if one can, it is one path to a successful future retirement.

For more on  Reflections and Musings, check back every Saturday for a new segment.

This is not financial, saving, spending nor retirement advice. Please consult a professional advisor.

Copyright © 2025 Achievement Catalyst, LLC

Reducing Financial Complexity - Starting the Journey

In the past, I typically had funds at several banks and brokerages.   I also had multiple accounts at each bank and brokerage.  Each brokerage account used different strategies and had numerous different stocks, both long term and for trading.  Part of the reason for the higher complexity was  the elimination of brokerage commissions, which allowed me to increase diversity with smaller lots without incurring a cost penalty.  Complexity didn't cost more.

Even though it was a lot, I was able to keep track of our savings, investments and trading without much effort.   I also enjoyed managing the many accounts, thinking I was adding value.     Recently, I evaluated my results and discovered (no surprise) that I would have done better if I had simply invested in the S&P 500 index and didn't ever sell.  Ah, the benefit of 20/20 hindsight.

So here is my plan for simplifying:

• Have a maximum of  two banks, which has been accomplished.  One is our checking account and bill paying service, but pays very low interest rates.   The other is a credit union for our bank savings since it pays the highest local CD rates.  We no longer consider opening a new bank account to earn the bonus.
  
  
• Minimize the number of single stock positions and replace with ETFs and CDs/Bonds. Our brokerage accounts have way too many small lots individual stocks in too many separate accounts. I'm not sure what the endpoint will look like.  At this point, I am selectively selling off many individual stocks and rotating in money market funds or bonds/CDs for now.   I will reinvest in MGK and VOO when there is market pull back or correction.
  
  
• Create regular streams of consistent annual income.  In the past, we put more emphasis on investment capital gains for our income.  However, that can be volatile to highly volatility.  I'm trying to use Dividend and Bond/CD income to create more consistency.  The challenge with this approach is reinvestment at maturity.   I'm stable until 2028.  We'll see how it goes after that.

Thanks for following my journey.  In the next couple week, I will be attend financial advisor presentations that claim to achieve this.  I do not want insurance or annuity solutions so I am interested in their options.

This is not financial nor retirement advice. Please consult a professional advisor.

Copyright © 2025 Achievement Catalyst, LLC

Like Father, Like Daughter - DIY Skills

I a big DIY and Fixit Dad.  It's part of my DNA as an engineer.   Before my daughter was in kindergarten, I used to have her help me assemble or repair things.   I also advised, but did not do, some of her physics and engineering projects.

My daughter is in college now, majoring in Biochemistry and Music Performance.   This year she is living off campus.  On move-in day, one of her roommates had the tension rod on her shower caddy come apart.  Her dad tried to fix it but could not. My daughter took over and repaired it.   He asked how did she know how do it.  Her reply, "My dad is an engineer and I watched him do things."   Made me proud.

I'm also including her in the financial aspects of paying for college education.  Ranging from how we invested to make it debt free to the paying for the cost each semester.  Hopefully, that rubs off on her in the future for financial skills.

Recently, I started showing her the DIY car maintenance that I do, since we will be lending her a car for this year.

For more on  Crossing Generations check back every Thursday  for a new segment.

This is not financial or parenting advice. Please consult a professional advisor.

Copyright © 2025 Achievement Catalyst, LLC

Retirement Income - Are they really passive?

There is a lot of discussion on the Internet about Passive Income.   IMHO, there is not such thing as completely passive (zero effort) income. Rather, there a sliding scale of effort or initial investment versus zero.

Here's how I rank them on a scale of 1-10, where 10 is full time work and 1 is no effort at all.

Social Security:   After retiring and collecting:  1.   While working:  10, it takes 35 years to get maximize benefits.

Pension:   After retiring and collecting: 1-2.  While working:  10 it takes 30+ years to maximize one's pension.

Rental.  After retiring and collecting: 3-7 because one still needs to deal with tenants..  While working:  3-7.

Dividend and Interest: After retiring and collecting:   3-7 because need to monitor investments.   While working:  3-7 because need to monitor investments.   

Side Hustles:  After retiring and collecting:  3-10,  since a side hustle is really a job. While working:  5-12 since there is no "no effort" side hustle.

I don't believe in "passive" or zero effort income.   Yes, there are lower effort income, but YMMV.

For more on Reflections and Musings, check back every Saturday for a new segment.

This is not financial advice. Please consult a professional advisor.

Copyright © 2025 Achievement Catalyst, LLC

Bond Funds Tax Loss Selling

Our bond funds are long term losses, but they make a good monthly payment.  Therefore, I decided to tax loss harvest.   I will sell the bond fund losses to offset capital gains that I have, so that we don't pay taxes on the gains.

Since I believed the market is strong, I have first buying the amount I plan to sell.    I will hold it for at least 31 days, to avoid being a wash sale, and then sell the same amount of shares for a loss.  Net, I will still have the same income as if I didn't make the trade.

The main risk is the bond fund keeps declining during the 31 days.  However, it is a risk I willing and able to take.   We'll see how this works out in the next month.

For more on  Ideas You Can Use, check back every  Tuesday for a new segment.

This is not financial advice. Please consult a professional advisor.

Copyright © 2025 Achievement Catalyst, LLC

Do What You Love and The Money Will Come...

IMHO, the worst advice ever. 

I prefer the Japanese Ikigai to do:   What you love; What you are good at; What the world needs; and What you can be paid for.

For more on  Reflections and Musings, check back every Saturday  for a new segment.

This is not financial advice. Please consult a professional advisor.

Copyright © 2025 Achievement Catalyst, LLC

YMMV

In 2012, I received shocking results that showed I had 4 90+% blockages in my heart arteries.  I took four stents to correct the issue OK, I had high cholesterol and high triglycerides.  I immediately went on a low fat diet advocated by Ornish and Esselstyn.  Their diet results were compelling.  Virtually, every participant lowered their cholesterol and didn't require further treatment.

In 2024, I did a stress test followed by a angioplasty.   The result was 80-90% blockage in the LAD.   I was disappointed.   My strict diet didn't prevent future blockages.  Though disappointed, I realized the YMMV even when one followed all the steps.   I started with robotic CABG but ended up open heart surgery, again contrary to expectations.

Yeah, despite all my actions, the blockages came back.  I came to realize that couldn't control all the factors.

I've concluded the same is true for financial situations.  I  did everything "right."  Then came the Great Recession.  We lost over half our savings.  We recovered, but it wasn't due primarily to our actions.  It was luck that the market recovered and that's why I've concluded YMMV, despite doing all the "right" things.

For more on  Reflections and Musings, check back every Saturday for a new segment.

This is not financial nor health advice. Please consult a professional advisor.

Copyright © 2025 Achievement Catalyst, LLC

My Sources of Retirement Income

Here are my approximate percentages of income sources for 2024.

53% Interest and Dividends

27% Social Security

20% Rental Income

0%  IRA/401K withdrawals

We have no pension.  

Having interest rates in the 4-5% range has been a great benefit.  My plan is for interest rates to continue in the 4-5% range until 2030.  If interest rates drop, we may need to make some IRA withdrawals or sell some stocks for a Long Term capital gains.

For more on Strategies and Plans, check back every Monday for a new segment.

This is not financial advice. Please consult a professional advisor.

Copyright © 2025 Achievement Catalyst, LLC

How Much Did I Need to Retire?

More than I thought.

I estimated that I would need to 20 times my final base salary to comfortably retire since neither of us had a pension. 

It did work, but it was really tight.  

What happened:

• The Great Recession of 08/09 happened right after I retired.   Reduced our retirement accounts by nearly 50% and it took several years to recover.
  
  
• Interest rates dropped to nearly 0%.   I was counting interest rates being around 5% for most of my retirement.
  
  
• While my spouse and received retiree health insurance at reduced premiums, our two minor children had to pay full premiums for health coverage.
  
  
• I retired at 49, which meant I wasn't eligible for Social Security.

What helped:

• The market recovered and my retirement accounts recovered.
  
  
• Early on, we paid off our mortgage which significantly reduced our monthly expenses.   We had already paid off our cars and didn't have any credit card or student loan debt.
  
  
• I had deferred compensation payments for 7 years during my fifties.
  
  
• We were able to avoid using any funds from our tax advantaged retirement accounts.
  

What made a difference:

• Interest rates are now at 4-5% making CDs and Bonds good income generating investments.
  
  
• The stock market recovered and is much higher than when I retired.   
  
  
• We were lucky and our parents left an inheritance equal to about 50% of our own savings.   We haven't spent any of the inheritance principal, only the earnings, and the principal has increased with the growth in the economy.
  
  
• I started taking Social Security benefits before full retirement age.
  
  

Bottom line:  I believe a significantly higher retirement savings amount is needed than when I retired.  If retiring early (e.g. in the fifties), I'm guessing 30-40 times final salary in savings.  If already receiving Social Security payments or a pension, perhaps towards the lower side.

For more on  New Beginnings, check back every Sunday for a new segment.

This is not financial nor retirement advice. Please consult a professional advisor.

Copyright © 2025 Achievement Catalyst, LLC

Trying to be Relevant Again

A while back, my nephew told me that being successful was much harder for him than for me.   He has no interest in my ideas and opinions on being successful.   It's as if I'm invisible and don't exist.   I can understand.  My path to success was graduate from college, work for a large corporation, and retire after being their for my entire career.   That doesn't happen anymore.

Also, when I started working, my retirement goal was to save $1 million, put it in a 5% CD and live off the interest for the rest of my life.  After all, that would be 150% more than my starting salary.    Today?  $1 million is far from enough and risks running out of money in retirement.  I should have made my goal $1 billion in retirement savings.

To become relevant again, I'm trying to give my kids a head start.    We'll pay for college and graduate school so that they have no student loan burden.   I'm also contributing a Roth IRA account equal to the maximum allowed or their annual pay, which ever is lower.   Finally, we're taking the opportunity to enjoy our time together and create exciting memories in great family vacations, which I didn't do as a child.

For more on Crossing Generations, check back every Thursday for a new segment.

This is not financial advice. Please consult a professional advisor.

Copyright © 2025 Achievement Catalyst, LLC

I Fought the IRS and..

I won. AMA.

I filed my 2024  tax returns early this year, on March 7, 2025.  I was getting a $362.27 refund.   I checked Where's my Refund in April and was informed that the IRS corrected multiple calculation errors on my tax return and I owed over $1800.   Arrrgh!

Since I registered on the IRS website, I decided to check a transcript of my return, before receiving the notice.   A quick check showed the IRS had made transcription errors.  To note, I still file a paper copy of my tax return, usually filled in by hand.  However, this year I used the PDF fill in forms to type the numbers to avoid transcription errors.   In addition, the IRS didn't allow a American Opportunity Tax credit because I forgot to put the student's SSN on the form, even though it was on the first page of the tax return for being a dependent.

Essentially, there were two errors.   The omission of the SSN and the IRS transcribing a $57.78 loss as a $5778.00 loss, which was caused multiple calculation changes.

Even though I had not received the official notice in the mail, I called the IRS and an agent answered the phone within 10 seconds.  Note, I made the call at 7AM.   The agent read the notice and the transcript and advised me to wait for the official notice since there were "too many" calculation errors.  She advised that I would have to amend my return.

I don't have a issue with doing a amended return, if needed.  However, as I told the agent, the amended return would be my original return, since it was correct.  But I would wait for the official notice.

A couple weeks later, I got the notice and called in during the afternoon.  This time the wait was 30-50 minutes.  The first two agents claimed they didn't know how to adjust my corrections on the phone.   I decided to call back about an hour before closing and got a third agent, who understood exactly my points and agreed to make the corrections that duplicated my original return, over the phone.

The next morning, I called back at 7AM, and only had a 5 second wait.  (This is a pro tip to call the IRS amendment and notice department at the beginning of the day).  I asked why I didn't see the adjustment.  She explained the changes had been made and had been submitted for approval.

Yesterday, I received a notice that the IRS had made the changes.  I checked Where's my Refund and I'm getting a $362.40 refund, $0.13 more than originally requested.

Supers Saver 1   IRS 0 for 2025.

For more on  The Practice of Personal Finance, check back every Wednesday  for a new segment.

This is not financial nor tax advice. Please consult a professional advisor.

Copyright © 2025 Achievement Catalyst, LLC