If there’s one thing we are biased toward, it’s the sense the present is somehow different from everything that came before. This can refer to financial affairs, sure, but it also refers to anything: education, technology, social interaction, you name it.
But it’s just a feeling. It’s actually never different. Or rather, it’s always different but in the same way.
Here’s what I mean:
I really tried to avoid talking about the tax plan, and couldn’t help myself. But that was more of a “feelings” piece, and less practical.
This article is coming from the other, more practical side.
In the U.S., our new tax plan has now gone into effect. We’re effectively “testing in production”, to borrow a phrase from the IT world. The rules were written so quickly, and without sufficient expert input, that while people are reasonably sure that most people will get some kind of tax cut, none of us really know whether they will be in one of those households, and whether the difference will be significant or paltry.
Applies to taxes too.
But it gets more interesting now. The IRS just released updated withholding tables. This is the thing that determines how much gets taken out of your check.
Now this might not seem like a big or interesting deal. Alas, everything is political, so we need to take a critical look at what’s about to happen, and what you may want to do to protect yourself.
If you have an HSA (Health Savings Account)—and if you’re eligible, it’s probably a good idea to have one—you still have time to make your contributions count toward last year. Since HSAs are a great financial deal (only offset by the generally cruddy nature of the health care plans that enable you to have one) maximizing your benefits is important.
I wanted to talk more about the HSA “testing period”, as I’ve done a bit more analysis, and the calculation is, thankfully, a bit less dicey than I originally thought, and it might influence you into making different decisions.
People always like simple things they can remember. Whether it’s using the Rule of 72 to figure out when an investment (or debt) will double, or whether it’s aphorisms like “own your age in bonds“, (or even “Mary Very Easily Makes Jam”, a mnemonic about the order of the first five planets in our solar system, which I will never forget) there’s an appeal to these tactics.
So you can imagine my interest when I was thumbing through an investing magazine and found a call-out box titled “Take 30 Seconds to Measure Your [Retirement] Progress“.
Well, funnily enough, I’ve got 30 seconds. And I’m curious how I’m doing on my path to retirement. It is, after all, something I focus on a lot (as you may have noticed).
So I went through the T. Rowe Price “30 Second Challenge” as they call it, and was appalled.
I don’t recommend you do this. Unless, of course, you want to panic.
If there’s one thing I hear from so many people, it’s that they wish they started something years ago.
Often it’s saving for retirement. “I just think of all those years I could have been saving, and I wasn’t doing it...”
And true, the power of compound interest does favor the younger folks. You’ve all seen those charts that say that you could invest $100 a month to have a comfortable retirement if you started at age 25, but need something like ten times that amount if you start twenty years later.
There are some things that you don’t know to be true. Most people didn’t put money into bitcoin back in 2012, because they couldn’t have known that $1 back then would be worth a bazillion squillion dollars today. (That still doesn’t make it an investment though.)
But pretty much everyone knows about their needs in retirement. I don’t know anyone who thinks that Social Security is going to be enough for them. If someone isn’t tackling this head-on (or at least making a plan to do it), it’s usually because of overwhelm.
And I have compassion for that. I’m overwhelmed by a lot of things. There are plenty of areas in my life where I am not nearly as prepared as I want to be.
However, some perspective is needed. Because there are too many people who feel like it’s too late for them, and that’s just not true.
If you’re saving for retirement (and you are saving for retirement, or at least working towards it, right?) you have probably been confronted with a choice when it comes to self-directed retirement accounts: Do you use a Roth IRA or a Traditional IRA?
I’m not going to rehash that debate here. I’m clearly on Team Roth and generally think that everyone would be better using a Roth (assuming you’re able to).
But there’s one piece of the decision-making process that I wanted to focus on here, since it seems relevant to the events of today:
Deciding on a Roth IRA versus a Traditional IRA based on tax brackets.
I’ve been avoiding it. I haven’t wanted to talk about it. I wanted to bury my head under a pillow and forget about the whole thing.
But, alas, it’s just too relevant to our work here.
So I’m going to talk briefly about the new tax bill that was just passed by Congress.
There are numerous full breakdowns about the bill (and plenty of people breaking down too), and I won’t claim this to be a full assessment. (Here’s one and here’s another oneif you’re curious.)
That said, I think some words are in order for something that affects every single one of us. This is, after all, our new reality.
And just like how I detailed my all-time top 10 favorite posts, I decided to do the same with yours.
Now, I know this couldn’t really be a good list of everyone’s “favorite” posts. But Google Analytics does a good job of measuring interest (even if it’s not good interest!) via its page views, and it’s the best I have to work with.
So, according to your page views, here are the all-time top 10 posts, as measured by you.
I’ve been writing this site for over five years. Wow.
Every year I do a round up of both my favorite posts and your favorite posts. But with the five-year mark passed, I decided to take a look back.
All the way back.
With over 500 posts (somewhere around 400,000 words), it’s almost impossible to narrow them down to my 10 favorites. But I gave it my best try, in the spirit of trying to distill the essence of what this site is all about.
So here are my all-time top 10 favorite posts, from when this site launched in 2012 to today. Enjoy! Read more
It’s not all about me. While I wrote about my favorite posts for this year, I’m much more interested in your favorites.
So I fired up my Google Analytics, that imperfect measure of interest, and looked up what were the most trafficked posts of 2017. (I did this for 2016, 2015, 2014, and 2013 too.)
Here they are: