Friday Reading: Pluralistic Ignorance
Frakt on Medicaid and the Oregon Medicaid Study by Russ Roberts at EconTalk
What a surprise to hear my former co-blogger Austin Frakt interviewed on the popular economics podcast EconTalk. Well done, Austin!
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Pay a Fee For Better Value
The word "fee" has a negative connotation. I’m not sure why when a fee is just a price tag on a service. Brokerage firms have to advertise "no fee IRAs." Credit card companies say "no annual fee." Is a no-fee product necessarily better than a product with a fee?
I see heirloom tomatoes selling for $4.99/lb at the store. I’m not that crazy about tomatoes but I don’t cry bloody murder when I see the price tag. I leave those heirloom tomatoes alone and let someone else have them. I’m sure plenty of people buy them; otherwise the store will have to throw them away every week. Those customers voluntarily pay the price because they value heirloom tomatoes.
Friday Reading: Where to Retire
One Perspective on the Best Places to Retire by Ann Carrns at New York Times Bucks Blog
I’m thinking I should just experiment with many places when I retire. Live in one place for a few months to a few years depending on how I like it. Move on to the next.
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Increase Tax Withholding On ESPP Gains
I filed my taxes in the first week of April. I received paper I Bonds on April 29, just in time to have them earn the 1.76% rate in the first six months as opposed to the lower 1.18% rate. That’s good. The bad news is for the first time in 20 years I’m paying a underpayment penalty. Not a large one, $15, but it still irks me.
The IRS rules say you must pay by withholding or estimated tax payments:
2014 HSA Contribution Limits
The IRS announced contribution limits for Health Savings Account (HSA) for 2014.
HSA Contribution Limits
Why Financial Advisors Favor Bond Funds Over CDs
CDs are a better deal than bond funds nowadays but investors often don’t realize it. You would think financial advisors would be all over it when they are living and breathing in the investment world day in and day out. However, besides Allan Roth and Larry Swedroe, I haven’t seen many financial advisors recommend CDs over bond funds. Do financial advisors have the same blind spots as investors, not realizing that time has changed and that the best CDs are better than bond funds for their clients?
It’s possible, but I don’t think so. Financial advisors are smart and knowledgeable people. If you and I can figure it out, they sure can. Certain inherent conflicts make them still favor bond funds over CDs even if their clients are better off with CDs.
Friday Reading: Internet Retirement Police
Meet Mr. Money Mustache, the man who retired at 30 by Kelly Johnson at The Washington Post
Blogger Pete MMM retired at age 30 but he still has a rental house and a blog. People debate whether he’s really retired. Pete calls doubters the Internet Retirement Police. When I retire if I still keep this blog, will the Internet Retirement Police nab me too?
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Can You File An Extended Warranty Claim After A Credit Card Is Closed?
I bought the watch in July 2011. The manufacturer has a 1-year warranty. I paid with my Starwood American Express card, which gives extended warranty for another year. I’m lucky it’s still within the 2-year mark.
American Express has a great online claims center for filing an extended warranty claim. The problem is I already closed the Starwood card because I was accumulating more Starwood points than I could use. I closed it before another annual fee would hit. After I closed the card, I removed the card from my online profile. I shredded the physical card. Now I don’t even have the full card number.
Why Investors Don’t Realize CDs Are a Better Deal Than Bonds
After reading my article last week CD vs Bond Fund: A Case Study, reader TJ asked:
“Why does anyone hold bonds EVER, if CD’s always win?”
Friday Reading: The Retirement Gamble
The Retirement Gamble by PBS Frontline
I only watched the first half. I’m saving it here as a bookmark to finish the second half.
I see it’s about 401k plan costs. 401k plan costs should be lower, but I also note that a 401k plan, good or bad, is part of the total compensation. Having a bad 401k plan basically means you are paid less, all else being equal. However, all else are not equal; otherwise you wouldn’t be working at an employer with a bad 401k plan. You can always go to an employer with a better 401k plan. If you can’t, it means you already maximized your human capital at your current employer, even with its bad 401k plan. If I’m paid well enough or if I have a job I like the most, I can deal with a bad 401k plan or no 401k plan at all.
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