Focus on Strengths and Interests

In 2018's Avengers: Endgame, Frigga says to a despondent Thor: "Everyone fails at who they're supposed to be, Thor. The measure of a person, of a hero, is how well they succeed at being who they are."

When I started raising kids, I wanted them to be like me.  After all, since I was successful, I felt doing what I did would work for them.  Well, no surprise, my kids mostly aren't like me.   They have different strengths and interests than I have, which was initially frustrating to me when they were younger. However, now I'm enjoying and celebrating their strengths and interests, because it makes them happy.

Since none of their "weaknesses" are debilitating, I've decided the best thing I should do is focus on their strengths and interests, since those will contribute to their path to success.  This has worked so far.  The kids have excelled in their strengths and interests, such as music and art which I have no demonstrate capability.   In addition, they have shown ability in sports that I had limited aptitude in playing.

I'm glad I let them be themselves instead of trying to "help" them be like me. It's worked out for the best.

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

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

Copyright © 2025 Achievement Catalyst, LLC

Investment Fees Analysis

This is a follow up to my post on Sunday, September 14: Checking Mutual Fund and ETF Expenses.

Keeping investment expenses low is one good way to increase one's investment returns.  Typically, there are management fees, operational fees (12b-1), and load (commission to seller) fees.  Here's the types of investments and the range of fees in one account we have:

	Yearly Fees
Type of Investment	Management	Operational 12b-1	One Time Load        Front End
Stocks	0%	0%	0%
Bonds	0%	0%	0%
ETFs	0.03-0.77%	0%	0%
Mutual Funds	0.4 -1.5%	0-0.25%	0 - 5.75%

  

The lowest cost option is 0% if one owns individual stocks and bonds since no commission is charged.  This requires the investor to research and choose their own stocks and bonds.  The next level are ETF fees.   Most index ETFs have fees below 0.2%.  The higher fees are usually associated with actively managed ETFs.  The highest level of fees is for mutual funds.  In addition to management fees, mutual fund sometimes charge operational fees, known as 12b-1, for marketing and shareholder service costs. Some mutual funds also have initial "load" charges, which are typically 3-5% of the purchase price, as a one time fee, which is sometimes waived for brokerage clients.

Yes, we have some high fee mutual funds, but we also have some low fee stocks, bonds and ETFs.  To determine the fees on the entire account, I calculated the proportional management and 12b-1 fee of all the investments in stocks, bonds, mutual funds and ETFs.  The effective fee for all the investments was 0.38%, which is the total fee since load fees are waived for clients of this brokerage.  0.38% per $10,000 is a $38 fee per $10,000 invested, which I consider a reasonable annual investment fee for the entire account. 

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

Typical Financial Scams

Financial scams cost victims $16.6 billion in 2024.   

Many already know about not paying attention to the letters from Nigerian Princes and Attorneys of distant relatives from England who offer vast sums of money if we contact them.  However, with social media and other electronic media, financial scams are evolving and becoming more elaborate.

Here are some of the possible ones I'm receiving:

• Requests from attractive strangers requesting connections social media.   I have clicked "ignore" on all these requests.   First, I don't need more connection.  Second, I don't need connections with people I don't know.
  
  
• Emails ads claiming I can win a prize from a major corporation, though they are not affiliated with the corporation.  Just click on the link.   No way.
  
  
• Emails claiming I have a package that needs to be delivered.    However, the email address is not a normal location for a delivery company.  Delete and block.
  
  
• Emails claiming my subscription to a service (usually anti virus protection) needs to be started or renewed.   Delete and block.
  
  
• Emails claiming that payment has been received for something I didn't order.  Usually, I delete and block.  Occasionally, I check my credit card transactions to determine if a charge was made or not.
  
  
• Texts claiming I have a package that needs to be delivered.   Ignore and delete.

Here are some that I have heard about but have not received, yet:

• Romance financial scams, sometimes from people pretending to be celebrities.  The scammer never meets the victims in person, just via email or texts.    Eventually, the scammer claims a distress that can only be helped if money is sent to them.  Ignore and delete.
  
  
• Threatening IRS agent calling about taxes owed and requesting payment in the form of gift cards.  The IRS never asks for payment on the phone.  If still unsure, call the IRS toll free number and request confirmation.
  
  
• Threatening text messages about unpaid tolls, even if you have never driven in that location.  Ignore and delete.
  
  
• Threatening calls, texts or voicemails that appear to be about a close relative, and instructions not to call the police.  Contact that relative and/or call the police.
  
  
• Someone overpays with a check and then asks for one to write a check refunding the difference.  The original check bounces and one just got scammed for the difference.  Decline and ask for the agreed to payment.
  
  
• Bank email claiming account has been fraudulently accessed and action needs to be taken.  Stay calm.  Do not respond to the phone number or email address sent. Do not transfer funds to a "safe" account or location.  Contact the bank at a verified email address or phone number found from an independent search on the Internet or go the the bank in person.

I'm sure that scammers will continue to evolve and modify their approaches.  If being contacted by an unknown or unexpected text/email/call, do not reply.  It's best to stay calm and consult with someone you trust, to determine if it is a scam or not.  

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

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

Copyright © 2025 Achievement Catalyst, LLC

Best Time to Start Taking Social Security

Spoiler alert: It depends. There is no simple right answer.  Below are some factors that may affect the decision.

An important retiree decision is when to start taking Social Security payments, whether early, at full retirement age (FRA), or delayed to maximum age of 70.

Taking it earlier reduces the payment, but one gets payments more years.   Delaying increases the payment, but one will receive payments fewer years.   The choice one makes depends on several factors.

One factor is how much each option pays in total.  It is straightforward to mathematically calculate which payment choice is higher in total, early or delayed.  Taking it early means getting more payments, which requires many years of getting payments at the later starts before breaking even, and after which the later starts will provide more total payments.  I summarized the effect of taking Social Security at 62, 67 and 70 the chart below.    For example, if one starts at 62, the recipient receives a smaller payment than at 67, but it will take until 78 for the total payments starting at 67 to match the total receive at 62.   

	Age Later Start is More
Age to Start	62	67 (FRA)	70
62		78	81
67 (FRA)			82
70

A financial factor to consider is whether you need the Social Security payments to cover expected retirement expenses.   If you have enough other sources of income, it may be appropriate to delay. A benefit of having social security payments is it significantly reduces the amount withdrawn from retirement savings.  Another benefit of delaying is the surviving spouse may receive a higher survivor benefit when the spouse with the higher payment passes away.  

A personal factor is health and personal life expectancy.  If one is in poor health or doesn't expect to live past the breakeven age, take it earlier.  If one is in good health and have a good probability of a life expectancy past the breakeven age, then delay.   Of course, there are no guarantees and unexpected occurrences can change expectations.  I've know people who passed away a year after FRA.   I've also know people who started at 62 and lived to their 90s.

A rare factor is whether they have minor children or a spouse eligible for auxiliary benefits, which are available to children up to 18 (19 if attending school) and a spouse caring for them. While most retirees do not have minor children, some do and this can be a substantial benefit and may push the breakeven age out further.

In my case, I originally was planning to wait until 70, to maximize the survival benefit for my spouse.  I consulted with three financial advisors at our different brokerages and a social security expert.  They evaluated my specific situation and recommended options.  They all had similar recommendations of starting as early as 62.  After reviewing the analyses, I decided to take social security earlier than my FRA, but later than the earliest starting age of 62.

 

At this point, I am satisfied and very happy with the decision I made. Social Security payments cover about 25% of our annual expenses which reduces our dependence on investment results.  I highly recommend consulting with a social security financial planning expert, which many brokerages will provide at no charge.

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

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

Copyright © 2025 Achievement Catalyst, LLC

Checking Mutual Fund and ETF Expenses and Fees

In our investment and retirement accounts, we invest in individual stocks, index ETFs, CDs, and bonds. Typically, these have no or low expense, management or trading fees.  In the past, I have invested with a managed investment account, typically for 1% of AUM (assets under management) with no additional wrap fee from the financial advisor.  I have avoided mutual funds and specialized ETFs which usually have higher expense and management fees.

My spouse has inherited accounts with numerous mutual funds and specialized ETFs.  I haven't paid much attention to the accounts, other than to monitor them and summarize results quarterly since we agreed to leave the investments as inherited.  While I know there are higher fees associated with some of these investments, I did not specifically look them up.

I recently attended a financial advisor presentation that adamantly claimed that fees were important to know and keep below 1%.   He even offered to do an analysis of fees for attendees at no charge. Given his emphasis on knowing fees, I have decided to do the analysis myself on my spouse's account, rather than meet with the advisor with the account information.  Expenses, management fees and loads can be found by researching each mutual fund or ETF online. The brokerage with my spouse's account even makes it easier by listing expenses on a account summary page.

I will summarize my findings on fees later this week.

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

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

Copyright © 2025 Achievement Catalyst, LLC

Lurking Tax Burdens for Retirees

When I started working, it was commonly accepted that income taxes would lower in retirement. I was looking forward to lower taxes when I retired.  However, it didn't quite work out that way.

  

Here are some "new" or increases in taxes retirees can expect:

• Social Security Taxes.   Up to 85% of social security payments can be taxed above certain total income.   The threshold income  number hasn't been adjusted for inflation since it was implemented in the 1980s.  IMHO, there should be no tax on Social Security payments for all recipients.  First, the Federal government doesn't acknowledge that 100% of FICA payments made by an individual has already been taxed.  Thus, the Federal government is taxing the same income twice.  Seems this should have been corrected many years ago, but the Federal government allows this inequity for seniors to continue.
• IRMMA (income-related monthly adjustment amount) payments.   This is the additional payment one is required to make for Medicare part B premiums based on income.   My response is, "Since when are any insurance premium payments based on one's income?"    Do I pay homeowner/renter insurance based on income?  Do I pay car insurance based on income?   No I pay based on benefits and risk assessment.   Thus, IMHO,  IRMMA is another stealth tax on Retired Seniors. 
• RMD (Required Minimum Distributions from Retirement Accounts) taxes.   OK, Federal government expects individuals to save for retirement.  After the individual saves, the Federal government tells them they must withdraw a certain amount a year and pay taxes, even if the retiree does not need the funds.   
• Real Estate Taxes.   As home prices increase, so do local real estate taxes.  Typically, one should expect increasing and higher real estate taxes over time.

I didn't realize that tax planning would actually become more important in retirement.  However, it appears good tax planning can minimize how much a retiree owes.

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

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

Copyright © 2025 Achievement Catalyst, LLC

Reaping the Rewards in Retirement

We spend decades working and accumulating money for our retirement.   After retiring, we start spending the funds.  How should this be done?

Spoiler alert:   There is no "right" answer.

Here's what may be available:

• Employer retirement plans.    For a few, profit sharing accounts contributed by the employer.  For some, private company pensions.  For many others, retirement accounts such as 401K, 403B and 457. These are now available for withdrawal or to rollover. There may also be an option to convert retirement funds to an annuity or to convert a pension to a lump sum.  Which option to do?
  
  
• Tax advantaged savings plans.  IRAs (both Traditional and Roth), annuities and whole life insurance.  Should these be used before or after taxable savings?
  
  
• Taxable savings accounts.  Investment accounts that hold stocks, bonds, mutual funds and ETFs.  Should these be used before or after tax advantaged savings?
  
  
• Social Security and/or Public Sector Pensions. These are monthly payments to retirees.  While private pensions are usually fixed,   Social Security and public sector pensions have annual COLA adjustments.  The big question is when to start?
  
  
• Health insurance.  Some may have employer sponsored retiree health insurance. Medicare is available to retirees 65 and older.  Otherwise, ACA insurance.  All require premiums be paid by the retiree.  Should one take original Medicare and supplement or sign up for Medicare advantage?

If it looks complicated to navigate, it's because it is.  There is no straight forward answer.  The decisions should be based on each person's own situation.  The only recommendation I have is to talk to different knowledgeable people, who do not gain financially from a decision you make, and weigh the different options.   

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

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

Copyright © 2025 Achievement Catalyst, LLC

Bank and Savings Accounts for Minor Children

A good start for children is to give them bank and other savings accounts when appropriate.

For our children we set up two financial accounts when they arrived.  One was a 529 college savings account. We contributed the maximum amount that was deductible from state income taxes each year.  The contributions were invested in two mutual funds, one growth and one value.  Over 20 years, the value of our total contributions would almost double at a 7% rate of return.  For reference, the average stock market annual return is 10%. 

The second was a custodial savings account, which we planned to use for funding her future allowance.  A side benefit of this account is that the interest earned is not subject to federal or state income tax.

We set up a third financial account once the oldest started earning money, a Roth IRA account.  The intent was to both teach her about saving for retirement and to give her an early start on retirement savings.   To fund the account, we used the funds in the custodial account for contributions.  The maximum allowed contribution to a Roth IRA in 2025 is the lesser of $7000 or amount earned.  For perspective, $7000 in a Roth account earning an average of 7% a year will be worth over $100,000 in forty years, tax free.

The custodial accounts will convert to their own accounts once they reach 21, while the 529 plan will continue to be owned by my spouse, with our child as the beneficiary.  If there are funds leftover, they can be transferred tax free to another family member.   A recent added benefit is up to $35,000 or 529 funds can be used as Roth contributions in the future.

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

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

Copyright © 2025 Achievement Catalyst, LLC

Get Free Money

A 401K retirement account contribution match is free money.

Some employers will partially or fully match employees' 401K contribution up to a specified cap amount.  For example, an employer might match up to 50% or 100% of an employee's contribution up to 6% of the employee's salary.   Effectively, the employee is immediately getting a guaranteed 50% or 100% gain on their contribution.   A different, but similar perspective, is that the match is an immediate 3 to 6% raise.

IMHO, an employer match is a feature that should be used in retirement planning whenever it is available.  Doing so is a smart practice of personal finance.

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

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

Copyright © 2025 Achievement Catalyst, LLC

Powerball - The Real Jackpot is the Lump Sum

"A nickel ain't worth a dime anymore." ~ Yogi Berra

Larger Powerball Jackpot due to Higher Interest Rate

The latest $1.79B Powerball jackpot is worth a $820M lump sum payout.   That's because $1.79B is based on a 29 year annuity payout.  The annuity amount fluctuates with interest rates. When interest rates are higher the total annuity payout is larger.   When interest rates were lower, the same $820M lump sum would have been about $1-2B.

Most winners take the lump sum, despite the higher payout with an annuity.

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