Jonathan Clements's Blog

You do not need $1,000,000 to retire or $1.5 million or any number some expert throws out on YouTube or social media. Those numbers are generated by people selling advice, investments or videos.

Having a simple dollar target makes planning appear easy, but IMO more likely to scare people into inaction because they see an impossible quest. Besides, we know very few people come near that amount and given they still retire, demonstrates the value of such assumptions. 

The median household retirement savings for Americans aged 65-74 is around $200,000. The average, or mean, household retirement savings for this same age group is considerably higher, around $609,230.

According to data from DQYDJ (2024), the median individual income for a 60-year-old in the U.S. is $60,000. Meanwhile, the average (mean) individual income at age 60 was reported as $81,424

What you need is an amount in retirement investments that when combined with Social Security and other steady income sources will generate the income you determine is needed to live as you choose. HD readers mostly know this, but I suspect the wider population does not. 

Aside from a person’s lifestyle, the number you need to accumulate as retirement investments depends on:

Your annual total income objective in retirement

Your age at retirement 

If you have a pension or annuity?

Your household Social Security benefits **

What withdrawal percentage are you comfortable using?

Do you have income for a survivor to consider

A strategy to cope with inflation

** As of January 2025, the average monthly Social Security retirement benefit for an individual retired worker at FRA (typically 66 to 67, depending on birth year) is approximately $1,976. For a household, this amount can vary. If both spouses are eligible for Social Security, the household benefit could be roughly double this amount, assuming similar earnings histories. Or, the total benefit could be about 1.5 times the individual earners benefit. 

So, even though I don’t know how to use a spreadsheet, it appears the equation may be something like this. 

Feel free to jump in. 

Pre-retirement income X % = desired retirement income - pension or annuity $ - household SS benefit /.04

Thus $60,000 X 80%= $48,000 - $0 (no pension) - $23,712 SS benefit = $24,288/.04=$607,200 needed for retirement assuming a 4% withdrawal rate.

Needless to say, mess with any of these assumptions (a pension changes a lot) and you get a different answer - and that’s the point after all. You can always get a different answer.

The post There is no magic number – and it sure isn’t $1,000,000 appeared first on HumbleDollar.

Recently, I have been fascinated with maximizing credit card rewards, but of course, it's a balance between complexity (i.e. mental overload) vs cost/benefits.

Here's my current stack:

Chase Freedom Flex - I was able to get the 10% cash back grocery bonus for 1 year. Since my wife and I live downtown, we shop majority of groceries at Trader Joe's. The 10% grocery reward is certainly nice, but it's expiring in a few months. We were planning to open another one of these, but it looks like Chase doesn't offer this bonus any longer.Citi Custom Cash - We use this for all of our restaurants/take outs. It's 5% cash back up to $500/mo. We spend slightly less than that on take outs, so it works!2% card - the rest of our purchases usually just goes on the 2% cash back card.

I'm also thinking of transferring $100K to Merrill Lynch to get their Platinum Honors tier, which will give me 5.25% CB for online purchases, and 2.62% on the rest. We also live downtown, so no need for a gas card.

So, Humble Dollar community, what is your credit card rewards strategy?

The post What is your credit card rewards strategy? appeared first on HumbleDollar.

Hot of the press: Poor Elon Musk, he's lost his richest person crown, down to second place behind Larry Ellison no less. I feel his pain and understand all about losing top dog status. Last week I was the richest real estate tycoon on the block and then lost my place to a young pretender, my cash vanished before my eyes and I had to do a distressed sale of a few of my properties. Hard times.

At least Musk still has his rockets and social media platforms to console himself with - all I had left were a few measly railroad and utility businesses. Fortunately I was playing junior monopoly and the young pretender was my grandson. I guess that's as close as I'll get to that monopoly money scale of wealth. One thing I'm sure of: losing billions couldn't feel any worse than watching my plastic hotel empire crumble!

The post Musk and Me: A Tale of Second Best appeared first on HumbleDollar.

Has anyone heard about this Network?

With my wife dealing with the financial aspects of her mother’s recent passing she has been dealing with the final hospital bill. When she received the final EOB from the insurance company at the bottom there was the following:

“(Her hospital) participates in the USA senior Care Network program. The part A deductible of $1,676 will be waived by the hospital. No benefits are due.”

From what I have been able to glean from the website many insurance companies participate in this program in which participating hospitals will waive all or part of many deductibles. This is for those with traditional Medicare with participating supplemental insurance companies only.

Some additional information from the network’s website:

Every patient that is incentivized to use your hospital through our program has complete supplemental coverage for all claims. This includes patient responsibility payments for lengthy admissions, all outpatient co-payments, and coverage for exhausted accounts.

Medicare Supplement Facilities Network

USA Senior Care Network offers Medicare Supplement carriers an opportunity to decrease the cost of Medicare Supplement insurance to existing Medigap policyholders by helping reduce the severity of premium rate increases. Our program is an excellent retention tool for carriers.

USA SCN owns the largest directly contracted Medigap facility network in the United States. Each of our contracted facilities has agreed to waive all or a portion of the Medicare Part A deductible.

This is a program that positively impacts all involved stakeholders. Carriers that participate in the Network will realize significant savings from the elimination or reduction of the Part A deductible, which benefits its insureds by helping curtail premium increases.

Medicare Select Facilities Network

USA Senior Care Network has entered into agreements to provide a national Medicare Select Network consisting of over 1,600 facility locations that have agreed to waive all or a portion of the Medicare Part A deductible. Select providers have been carefully chosen and fully credentialed. Medicare Select carriers can offer their insured members extensive network coverage.

For more information this is the network’s website

https://usascn.com/

 

The post USA Senior Care Network appeared first on HumbleDollar.

When I was out for a run this morning I had a breakthrough thought as to why I'm not mega-rich. It's quite simple: I didn't follow all the conventional financial wisdom with the dedication needed to reach those lofty heights. Apparently I've failed because I thought differently about some normal pearls of wisdom.

Take the often-touted phrase, "If it appreciates, buy it; if it depreciates, lease it." Unfortunately, I don't think this way. I like owning my cars outright, and continually leasing just wouldn't work for me. This has apparently cost me a fortune in depreciated assets that should be making me rich in the markets.

Then there's the wisdom to buy a "forever home" for the maximum you can afford and sit tight until your final days. I missed the memo on this one as well. All those relocation costs and realtor fees have vanished into thin air, never to grace my retirement accounts and build my financial standing.

Next, we move on to my career and the old adage of "climbing the corporate ladder." I achieved director's level and then promptly quit to try my hand at starting my own business. This was another setback in my quest for riches and extra cash to invest in the S&P 500 for my betterment.

When managing your own business, you run squarely into the sage advice of "grow or die." I admit to doing this for a few years until I had a stable operation, but if I'm totally honest, after that, I couldn't be bothered to get any bigger. I turned down a few opportunities to acquire competing companies and drive my profits upwards, once again thwarting my ability to invest even greater amounts into the markets.

So there we have it. I could be wealthier, possibly by quite a lot. Do I regret my choices? Not in the slightest. The cost to my values and life philosophy made following some of this financial wisdom unpalatable at best.

My path to retiring in my late fifties wasn't a straight line, but a series of choices that prioritized my values. This isn't a story about ignoring financial wisdom; it's about being flexible and adaptable. My career choices and lifestyle decisions might have seemed counterintuitive, but they were intentional.

Obviously, we should build a foundation of smart financial habits, but in the game of life, I think the ultimate goal isn't just to accumulate wealth—it's to build a life that you genuinely want to live. I seem to have achieved that at a cost I happily paid. I may not be mega rich but I'm mega content.

 

 

The post How I Failed My Way to Financial Freedom appeared first on HumbleDollar.

Laughter, the Best Medicine

We all know that laughter is the best medicine. And while Humble Dollar usually gives us wisdom about money, markets, and life, maybe it’s time to add a little humor to the mix. Let’s send Jonathan a laugh.

Now, humor is always a risk—especially across cultures. The Brits, after all, are famous for their love of irony and wordplay. But clean, clever jokes never go out of style. Here’s a start:

How many financial advisors does it take to sell an ETF?

Answer: One to sell it—and 666 to create 666 more ETFs.

Or how about:

Why did the retiree refuse to invest in bonds? Because they said they’d had enough “commitments” already.What’s the difference between a market correction and my teenager? At least the correction eventually ends.Why don’t economists ever tell good jokes? Because the punchline is always, “On the other hand…”What did the ETF say to the mutual fund? “Sorry, but I’m just more attractive in passive relationships.”

You get the idea. A groan-worthy pun, a market-themed quip, or a gentle poke at ourselves as investors. Keep it clean, keep it kind, and send Jonathan something that will make him smile. After all, a chuckle shared is worth more than compound interest.

The post Laughter, the Best Medicine appeared first on HumbleDollar.

One of the biggest surprises in retirement is how the tax rules around charitable giving shift. During your working years, you might have claimed a deduction for every gift you made. But now, with the standard deduction so high—$32,300 for couples 65 and older in 2025—many retirees no longer itemize. That means the tax benefit from donations often disappears.

Still, there are strategies that can help you get more impact—for yourself and for the causes you care about.

Bunching Gifts
Instead of giving the same amount every year, some retirees find it useful to “bunch” or double up their giving. Suppose you donate $15,000 a year. On its own, that won’t push you over the standard deduction. But if you give $30,000 in one year, you can itemize and capture a bigger tax benefit, then fall back on the standard deduction the next year.

A popular way to do this is through a donor-advised fund. You contribute a lump sum in the year you want the deduction, then take your time sending money out to charities over the following years.

Giving Directly from an IRA
If you’re 70½ or older, another tool is the Qualified Charitable Distribution (QCD). This lets you transfer money straight from your IRA to a charity—up to $105,000 in 2025. If you’re already taking required minimum distributions, a QCD counts toward them. The key benefit: the transfer doesn’t show up as taxable income.

That can keep you in a lower tax bracket, reduce the tax on your Social Security benefits, and even help avoid Medicare surcharges. For many retirees, once RMDs begin, QCDs become the most efficient way to give.

Why Medicare Matters
This is more than just income taxes. Higher reported income can raise what you pay for Medicare Part B and Part D through something called IRMAA—short for Income-Related Monthly Adjustment Amount. These surcharges kick in once your modified adjusted gross income passes certain thresholds. The surprise for many retirees is that even a small bump in income—from extra IRA withdrawals or capital gains—can trigger hundreds or even thousands of dollars in added premiums each year. Because QCDs keep donations out of your taxable income, they can help you stay below those IRMAA cliffs.

A Real-Life Example
Consider a couple in their early 70s who give $20,000 each year to charity.

If they simply write a check: Their income is $120,000, but after the $32,300 standard deduction, the $20,000 doesn’t provide any additional tax break. Their $120,000 still shows up as taxable income, which also counts toward Medicare’s IRMAA thresholds.If they bunch their donations: They give $40,000 in one year. That allows them to itemize and deduct more than the standard deduction that year, cutting their taxable income by roughly $8,000 compared to taking the standard deduction. The following year, they give nothing and take the standard deduction. Over two years, they’ve saved a few thousand dollars in federal taxes.If they use a QCD: The $20,000 is sent directly from their IRA to the charity. It still satisfies part of their required minimum distribution, but it never shows up as taxable income. Instead of reporting $120,000, they report $100,000. That not only lowers their income tax bill but also helps them avoid a Medicare premium surcharge, which can easily add more than $1,000 a year per person.

For this couple, the QCD produces the biggest combined savings.

Appreciated Assets
If you own stocks, mutual funds, or real estate that’s gone up in value, donating them directly to charity can be smart. You avoid paying capital gains tax, and you still get to deduct the fair market value if you itemize. It’s a win-win: the charity gets the full value, and you sidestep a tax bill.

Other Approaches
Some folks look at charitable trusts, which can provide lifetime income to you or heirs while leaving the remainder to charity. Others name a charity as the beneficiary of an IRA, since heirs would otherwise pay income tax on those withdrawals.

The Big Picture
The right strategy depends on your stage of retirement. In the early years, bunching donations or gifting appreciated stock might pair well with Roth conversions. Later on, QCDs often take the lead role once RMDs kick in.

Giving is always about generosity first. But with a little planning, it can also be about efficiency—helping your dollars go further for both you and the causes you support.

Research and final editing were AI-assisted. This article is intended for general information only. It isn’t advice, and you shouldn’t take action based solely on what you read here. Instead, use it to help frame the questions you bring to your tax or financial advisor.

 

The post Smarter Giving in Retirement and the Medicare Gotcha  appeared first on HumbleDollar.

After reading Richard Quinn’s recent post about Medicare, I thought this would be a good place to solicit thoughts.

I have a 64 year old brother who is single, has no other immediate family, and is currently on Medicare disability due to mobility issues.  He has a medicare advantage plan which has coverage for his prescriptions (Part D), vision and dental.  As he is now within 3 months of his 65th birthday, he has the opportunity to switch to original medicare without underwriting, which he would fail (this window expires at the end of February).  The out of pocket cost with a Medigap policy and Part D (not even considering vision or dental) would be considerably higher than he is currently paying, as he pays only the cost of the Part B premium now.

My brother's financial position is precarious to say the least and he does not have the means to pay more for health insurance.  The expected cost increases in 2026 alone are going to be a significant financial burden.  Additionally, his disability social security benefits, while insufficient for daily living, are slightly too high for him to be eligible for medicaid or any other assistance in the state where he lives. 

I am concerned that while his Advantage plan is considerably less money than original Medicare on the front end, the cost of co-payments, deductible, etc. will also be too much for him and serve as a disincentive to receive care that he might need (I have seen this already to some extent).  His doctor choice is also much more limited, although his current doctors accept his insurance.

I have considered offering to pay for a Medigap policy (likely Plan G) and a Part D Plan for him so that he can convert to original medicare and continue to only be responsible for his standard Part B premium.  My concern is that this will be an ongoing expense and I have no idea how that expense will rise over time.  Of course, I also have my own medical costs to consider as well as my wife's, not to mention retirement costs in general.    

I am soliciting suggestions and views from those of you who have experience with this (I am a few years away from Medicare age myself).  Is Medicare Advantage good enough?

I realize that many people live happily on Medicare Advantage plans, but I also have heard that those who have substantial medical issues tend to prefer original Medicare with a gap policy and Part D. I also know that changes to Advantage policy pricing and benefits are likely to be coming.     

Thank you in advance for your thoughts.

The post Helping a Sibling with Health Insurance Costs? appeared first on HumbleDollar.

I'm still at my vacation home, but the season is drawing to a close. The flock of summer visitors have flown back to the real world, to their bustling, busy lives. A vacation home is a funny old thing, isn't it? A temporary nest for most, a place to perch for a week or two before the demands of reality call them back.

But there’s a small, peculiar flock of us who have decided to linger a little longer, notching up the months because we can. We're all retired—a gentle, normal bunch of folks, still enjoying the quiet, lingering magic of the quieter season. I've gotten to know this little group, bumping into them on walks along the beach or cliffs, and stopping for a friendly chat while waiting to be served at the harbour bar. We all seem to share a common story.

Take "Bubbles," for a simple example. Her interesting career was really a path toward a simple, comfortable retirement. While she worked hard, she worked even harder on her retirement hopes, saving for these very times to live a life by the sea and enjoy her favorite champagne—which, of course, is why we affectionately call her that.

Then there's Allan, who loves to talk about his boat moored in the harbour. He's cultivated a salty sea dog look—grey beard and all—but he cultivated his retirement by living below his means for years to enjoy that wonderful boat. I see it not as a sign of wealth, but as his reward for a life of prudence.

And what about Karen and Steve, who have one of the fancier homes? Surely this breaks the theme? Not at all. They bought the lot when our little area wasn't very popular and prices were cheap, spending their weekends and vacation time for twenty years, remodeling their wonderful home into a peaceful heaven to enjoy their retirement dreams. Some might see a house of privilege, but I see a house built on hard work and delayed gratification.

So, if you ever find us at our little harbour bar hangout, don't mistake us for the naturally privileged. We’re the product of dinners at home instead of fancy restaurants, past owners of cars so old they had a family name, and vacations postponed to claim a retirement dream. It was thrift stores and careful choices that propelled us to our coastal homes, where we now linger and enjoy the empty beach and salty air of the wild Atlantic swell.

 

 

The post The Long Game of Harbour Stories appeared first on HumbleDollar.

I keep a spreadsheet that helps me estimate my current year taxes. As a result of tax changes from the Big Beautiful Bill and further tax changes resulting from the recent Ohio budget bill, I expect tax savings in 2025 in the neighborhood of $1800 on the Federal side and $300 on the State side. And, I expect further savings in 2026.

Political discussions are forbidden on the Humble Dollar site and this post is not political commentary.  All of us probably have opinions about how reductions in Federal funding have been implemented this year. But no matter our opinions, the fact is they reflect real reductions to some organizations that are doing good work.

And, while I always appreciate lowering my cash outflows, I must admit that I did not need either the Federal or State tax cut. I was getting along fine at the prior rate of taxation.

I have concerns about the people impacted by these cuts. Reasonable people can disagree about the role of government in funding any number of programs. That doesn’t mean they are all worthless. And, maybe some should be funded to a greater degree by private individuals who believe in their work.

With my trusty spreadsheet calculations, I have mapped out a plan to donate my tax savings to organizations that saw cuts. First, I’m planning on upping donations I was already making to the local food bank, a voluntary health organization, and the local PBS station.

I also used Bing Co-Pilot to ask targeted questions about regional organizations that are likely to be hard hit by funding cuts. I learned of a charity, highly rated by Charity Navigator, that provides a wide range of services to underserved populations in my area. They expect to see a significant reduction in Federal monies. This organization was not previously on my radar but seems to deserve my consideration.

I have no illusions that an extra $2100 from me is going to save the world. But, if the government is going to step back, this is small way I can step forward.

The post Big Beautiful Bill Response appeared first on HumbleDollar.