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How to Calculate Safe Spending Rate from a Fixed Pension

Aug 08 2019

We recently had the pleasure of analyzing a pension from the state of New Jersey. The pension amount, while generous, had not been adjusted for inflation for the past eight years. Prior to that, the adjustment was only 60% of the Consumer Price Index. The New Jersey Education Association explains:

A cost of living adjustment (COLA) protects retirees’ pensions from eroding due to inflation. In New Jersey, the COLA calculation is 60 percent of the Consumer Price Index (CPI) annually. Chapter 78, the 2011 pension and benefits law passed by the Legislature and signed by Gov. Chris Christie, suspended

The Deep Value of Useless Things

Aug 06 2019

At the risk of sounding like an aging baby boomer (oops, that is me), I want to put in a pitch to value highly those things that aren’t worth much. So here’s why everyone else is wrong.

A liberal arts or humanities major

There are an awful lot of parents these days who have a seizure if their progeny announce they are majoring in English or worse yet, French literature, art history, or history. This is close on the heels of recovery from the previous seizure when they saw the tuition bill. In the instant mental computation available to every …

Read and Reflect on Fiction with Financial Themes

Aug 06 2019

Summer isn’t over and there is still time to relax on the beach, the park, or your own backyard with a good book. And when we say good book, we don’t necessarily mean a book with financial advice.

USA Today’s “Alpha women and fancy yachts make for good summer investing and finance reading” offers suggestions for recreational ways that you can get more insight into your money management and your own financial habits. Reading informative texts is needed to learn about finances but you can also learn from fiction and memoirs. You read about other peoples’ triumphs, …

Inherited 401k plan

Jul 15 2019

An inherited 401k plan isn’t necessarily a different kind of retirement plan from a regular 401k plan in the hands of the original participant. However, the rules around an inherited 401k plan are unusual enough to warrant their own review.

When an individual inherits a 401k plan, generally this individual must begin taking minimum distributions from the plan, on a preset schedule. There are a few things to consider, the first of which is whether the beneficiary is the spouse of the original owner, or another person (non-spouse).

If the beneficiary is a spouse, special options are available for handling …

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