Think Accumulation for a Successful Retirement

For me, the accumulation phase for retirement savings was from the twenties until my sixties.  

Twenties - This was the most difficult accumulation period.   During that decade, I bought a house and a car, which created monthly expenses.  I was also paying off my student loan.  My accumulation seemed to grow very, very slowly.

Thirties -  Accumulation was easier bit still seemed to grow slowly   I no longer had a student loan or car loan payment.  I was also able to refinance my mortgage from 12%, to 7%, to 5%.   In my early thirties, I was earning double my starting salary.  By late thirties, I was earning about 4 times my starting salary due to promotions.

Forties - This was out best accumulation time.   I was promoted again and my base salary by the end of my forties was 8 times my starting salary.  This was my peak earning years and as a result we had peak accumulation.

Fifties -  If I had not retired early at 49, this would have continued to be accumulation from wage income.   Part of our accumulation during this time was due to inheritances from our parents who passed away.  

Even with an income increases each decade, I continued to live the same lifestyle in my twenties and  thirties.   We did upgrade our lifestyle to a larger house and new cars in my forties.   However, we still lived below our means.    For example, we still live in the same house, drive the same cars after 20 years, and did our first purchase of a flat screen TV during our fifties.

Definitely, YMMV.  The actions that worked for us to accumulate enough for a successful retirement won't work for everyone.   

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

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

Copyright © 2025 Achievement Catalyst, LLC

Best, Good and Bad Personal Finance Choices

Successful personal finance is about choices, specifically making good choices.   How does one learn to make good or best choices? Experience.  How does one get experience? Bad choices.

The table below shows my opinion about some personal finance choices I've made.  The blue is what I have actually done in the past.  The green is what I do now or just before retiring. The black options I didn't ever do.

	Best, Good, Bad Options
Activity	Best	Good	Bad
Student Loan  Amount Borrowed	None	Less than expected  starting salary	100% of tuition, expenses room and board or exceeds starting salary
Credit Card Use	Pay current balance  ahead of due date	Pay entire balance on time	Pay the minimum  every month
Monthly Spending when I Was Working	Less than 80% of net pay	Less than 90% of net pay	Over 100% of net pay  in my first month

Did I learn from my experiences?   Yes, and I think I improved, especially in monthly spending.   For me the new choices let to financial results that were better.  YMMV. 

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

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

Copyright © 2025 Achievement Catalyst, LLC

Increase Savings, Avoid Living Large

To me, too many people try to be what others consider as financially successful, instead of being what makes them personally financially successful.  Social media and marketing convinces us we need more to be successful, which causes us to never feel successful, because we need more...the newest phone, the coolest car, the best house and dazzling vacations.

Personal finance success first depends on balancing income versus spending when starting out.  Next, personal finance success requires discipline to increase saving more than increasing spending as income grows.  Unfortunately, many people choose to increase spending only as their income increases, instead of saving more and are typically one or two paychecks away from financial disaster.

Don't let living large costs ruin a possible successful retirement.  Instead, choose making one's future self have a successful retirement.

A savings habit can help minimize living large costs that cause financial issues.   Simply, start by saving 10% of one's gross pay.  Put every raise into savings until 20% or more  of gross pay is reached.   Then make the savings automatic.  While the savings won't seem like much at first, before long one will have saved a year's pay.   Invest the savings in a total market or growth index fund.

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

Become a Millionaire for Only $158.15/month

That's only $5.20 per day, less than the cost of a Starbucks latte.

No, this is not a scam.  Yes, it is possible with two assumptions.   First, the investment has average returns of 10% per year.   Second, the investment is held for 40 years, with all dividends and interest reinvested.  

The annual return is achievable since the S&P index has returned about 11% per year on average over the long term.  If one takes less risk with a 60/40 diversification of stocks and bonds, the return is about 7% a year and more funds need to be invested to reach $1M in 40 years.  If one takes even less risks and invest in CDs/Bonds for a 4%, significantly more funds are need.

	Invest to Become a Millionaire
Monthly (Daily) Contribution	Average Yearly Return	Total Paid	After 40 Years
$158.15 ($5.20)	10%	$75,912	$1,001,083
$381.00 ($12.53)	7%	$182,880	$1,000,053
$846.10 ($27.81)	4%	$405,150	$1,000,872

OK, what if one can only afford $158.15 a month.  The table below shows the impact on average annual returns on the number of years to reach a $1M.

	Invest to Become a Millionaire
Monthly (Daily) Contribution	Average Yearly Return	Total Paid	Years to Reach $1,000,000
$158.15 ($5.20)	10%	$75,912	40
$158.15 ($5.20)	7%	$182,880	52.1
$158.15 ($5.20)	4%	$405,150	77.5

OK, what if one can afford more than $158.20 a month.  The table shows the impact on contribution amount on the number of years to reach $1M.

	Invest to Become a Millionaire
Monthly (Daily) Contribution	Average Yearly Return	Total Paid	Years to Reach $1,000,000
$158.15 ($5.20)	10%	$75,912	40
$263.40 ($8.66)	10%	$110,628	35
$442.41 ($14.55)	10%	$159,300	30

Here's what I'm doing to enable my children to be millionaires on their own.  For my children's Roth IRAs, I'm investing or will invest $159 per month.   For the initial investment, I put $159 into 4 mutual funds/ETFs from Schwab: ETFs - SCHB (Total Market), SCHG (Large Cap Growth); Mutual Funds-SWPPX (S&P 500), SWLGX (Large Cap Growth).   I will monitor returns over the next few months and narrow down to one or two investment options for the future.  Also, based on the analysis above, I will increase the amount contributed when the market declines.

At this point, I am leaning towards the mutual funds, since I can invest an exact dollar amount of $159 each time, whereas I am required to invest in whole shares for the ETFs.

Disclosure: I am not compensated by Schwab for any mentions made in this post.

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

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

Copyright © 2025 Achievement Catalyst, LLC

Spent All My Paycheck Before Next Payday

I ran out of money my first month of working, a few days before my first paycheck. 

When I started working, I was given a one month advance to cover living expenses, which I think was paid back with future paycheck deductions.   Back then, I spent on a cash basis since I didn't have a credit card yet.

I was paid at the end of the month.  With three days left in the month, I ran out of money.  No cash in my pocket.  Fortunately, I didn't have to pay any bills nor buy any essentials such as food or gas.  I was concerned but not worried yet. 

Although nothing bad happened,  I decided that I would manage my money better and never overspend my paycheck again.  One of my better personal finance decisions.

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

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

Copyright © 2025 Achievement Catalyst, LLC

Cash Strapped Millionaires

Here's one reason that millionaires with $1-2 million in net worth don't feel wealthy: they don't have much free cash.   

Most of their net worth is not liquid nor easily accessible.  On average 39% of their net worth is their home, as a result of significant appreciation since 2020 and 33% is in retirement accounts.  Only 17% is in liquid assets, which would be stocks, bonds and cash.  

Combine the above asset distribution debt servicing such as student loans, home mortgage, and car payments.   And don't forget daycare costs. Thus, most of their paycheck is already committed necessary expenses or debt service.  

A million isn't what is used to be 50 years ago.

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

Taxes on Social Security Payments Should Be Eliminated

Contributions to Social Security were taxed before being withheld.  Until 1984, Social Security payments were not taxed.  In 1984, 8% of Social Security recipients paid federal income tax on the payments.   The thresholds for Social Security being taxed were set in 1984 and have not been adjusted for inflation. Today, 56% of recipients pay federal income tax on Social Security payments.

Two bills that have been reintroduced to eliminate taxes of Social Security: Senior Citizens Tax Elimination Act (H.R. 1040) and You Earned It, You Keep It Act.

For more on Reaping the Rewards, check back every Friday 

This is not financial, legislative, social security, tax nor retirement advice. Please consult a professional advisor.

Copyright © 2025 Achievement Catalyst, LLC

Benefits of Doing My Own Tax Return

My dad always did his own tax return.  My father-in-law always did his own tax return.  They both did their returns by hand and mailed them in.    Like father like son.  I also do my own  Federal and State tax returns, without tax preparation software.   However, I do use Excel spreadsheets for entering and doing calculations for each form.  Then I fill out each form and mail in my return.

The only time I didn't do my own tax return was during an international assignment in Asia, which resulted in a very complex tax return that the company did for us.

Here's why I like doing my own tax returns:

• I learn how different types of income (wages, social security, dividends, capital gains, rental, IRA distributions) are treated taxwise and how they can affect my tax liability.
• I can adjust certain types of income (capital gains, IRA distributions) to minimize tax liability.
• I can adjust certain types of deductions (charitable contributions, capital gains losses) to minimize tax liability.
• With the adjustments to income and deductions, I can stay below Medicare IRMAA premium increases and stay in a lower 12% (instead of 22%)  tax bracket.  In addition, staying $251 below the 12% tax bracket limit,  dividends and long term capital gains are taxed at 0% for 2025 tax returns.
• With spreadsheets, I can easily change one or more inputs and immediately see the affect on my tax return. I can't do this as easily on tax preparation software.

Doing it by hand on Excel does require more preparation effort, including reviewing the forms and instructions each year..  I also need to update the Excel spreadsheet every year, but usually there are not major changes for the forms that I use.  Best of all, I can do a real time estimate of our tax liability during the year and make adjustments to income and deductions before the end of the year.

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

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

Copyright © 2025 Achievement Catalyst, LLC

Wawa Gas is a Great Price

I'm a fan of buying gas at low prices.  My dad used to save a penny when gas was $0.28 per gallon.  While that isn't much, it was about  3.5% savings.   

I used to shop for the lowest gas price since there an numerous gas retailers in the area and have decided to buy from two, despite many options from major companies.  First, it was Costco gas, which requires membership, but we have one. Then it was Kroger gas with up to $1 off based on fuel points earned from shopping, and we regularly shop at Kroger.   Both of these gas providers are convenient since they are within a 2.5 miles from our house and on the way to many destinations.

Recently, there has been a new entrant in our area, Wawa.  I've noticed they regularly sell gas comparable to Costco, but no lines and are comparable to Kroger with discounts of $0.40 to $0.60 per gallon when using fuel points.  In addition, Wawa offers no ethanol gas which my spouse prefers.  Recently, Wawa regular gas with ethanol was $2.43/gallon.  Kroger was $2.90/gallon and Costco was $2.30/gallon in today's price check.   

Wawa is becoming my go to gas retailer when away from home for the following a few reasons:  multiple convenient locations, no gimmicks to lower the price, and no ethanol gasoline, which no other local retailer offers.

Disclosure:  I received no compensation for this post.

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

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

Copyright © 2025 Achievement Catalyst, LLC

Maximize Charitable Contribution Now If You Itemize Deduction

For 2026, the first 5% of AGI of charitable contribution will be excluded from itemized deduction.  For example, if one's AGI is $100,000, the first $500 of charitable deductions will be excluded.

If possible, make charitable deductions planned from 2026-2028 in 2025.   One option is to create donor advised fund to cover 2026-2028 charitable contributions and take the itemized deduction in 2025.

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

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

Copyright © 2025 Achievement Catalyst, LLC