Articles by Oakleigh Wealth
John D’earth’s Retirement
Two weeks ago, The Daily Progress, Charlottesville’s local newspaper, featured one of the most inspiring retirement announcements I’ve ever read. John D’earth—the legendary jazz trumpeter, bandleader, and director of jazz performance at UVa—officially “retired” this past December.
Should I take My Pension as a Lump Sum?
For many, employer pensions are a key part of retirement planning. While these plans are increasingly rare, they often represent a significant portion of anticipated retirement income. If you're nearing retirement or already receiving pension payments, you may face an important decision: Should you opt for a lump sum distribution or continue receiving a lifetime stream of payments?
How to Employ Your Children (and Why)
My oldest son always asks how he can earn money, so this year, I employed him to help pack and ship holiday gifts to all of my clients. He actually made my life easier during this busy time of year, but the best part was seeing his pride and satisfaction.
A Proclamation of Thanksgiving
This past Sunday, I heard this excerpt from Abraham Lincoln’s Thanksgiving Proclamation of 1863. It was penned mere months after Gettysburg, the bloodiest battle of the American Civil War. It was a year of perilous uncertainty when our nation was on the brink of moral and political collapse, and families were bitterly divided and grieving. And yet, even amidst strife and humbling loss, Lincoln extolled his hopeful thanksgiving for the nation’s many blessings.
529 Plan Hack: Maximizing state tax benefits by routing education expenses through a 529 plan.
529 plans are a powerful tools for funding education in the United States, offering tax-free growth and withdrawals for qualified expenses. In some states, they also come with an attractive bonus: state income tax deductions or credits for contributions.
While these incentives are designed to encourage long-term saving for education, savvy families may be able to utilize 529 plans to receive an immediate tax deduction for qualifying education expenses they are paying for now.
Fooled by Certainty: Embracing Uncertainty in a Random and Noisy World
We live in a world governed by random events, yet humans are terrible at thinking probabilistically. We vastly prefer certainty over probability, narratives of skill and design over luck, and we find all manner of patterns within noise.
We listen to the “experts” who talk confidently about the future and make concrete projections about what’s coming next. Can you imagine an economist who states, “There is a 60% chance of a recession next year” getting any air time? We much prefer the certainty of the broken clock, even if it’s only right twice a day.
Halloween is the most altruistic holiday of the year
This sentiment may be somewhat of a “hot take.” Notwithstanding the candy-hoarding tendencies of my five- and ten-year-old, I would argue that this single sugar-filled night may be the most generous and communal holiday. This bold assertion even includes the fast-approaching pseudo-secular holidays of Thanksgiving, Christmas and Hanukkah that are now only weeks away, (even though Costco has been selling fake trees and 10-foot light-up lawn ornaments since August).
Qualified Charitable Distributions
A Qualified Charitable Distribution (QCD) is a tax-savvy way for individuals aged 70½ or older to donate to a charity directly from their IRA (Individual Retirement Account). This method allows you to transfer up to $100,000 annually ($200,000 if both spouses qualify) to a qualified charity without counting the distribution as taxable income.
What sets the QCD apart from just writing a check or donating stock is that it also counts toward satisfying your required minimum distribution. QCDs also directly reduce your taxable income, even if your total deductions don’t exceed the standard deduction.
Medicare Open Enrollment
The Medicare Open Enrollment Period (October 15 - December 7) is the ideal time to review your coverage and make any changes to your Medicare Advantage, Medicare Supplement (Medigap), or Part D prescription drug plans. Here’s when you should consider making a switch:
Your health needs have changed
Your plan's cost or coverages have changed
You've moved to a new area
Everyone loves their insurance until they need to use it
Our family was rear-ended on route 64 over Labor Day weekend. Everyone involved was un-injured, but three cars were totaled, including our beloved 2016 Honda Odyssey. Because we were not at fault, our insurance company was not involved in the claims process. Nevertheless, this experience reinforced the importance of having ample liability insurance, especially uninsured/underinsured motorist coverage which protects you.
Health Insurance Options Before Medicare Age: Planning for Early Retirement
Securing medical insurance becomes a top priority if you plan to leave the workforce before reaching the Medicare eligibility age of 65. Without access to employer-sponsored health insurance, you’ll need to consider alternative options for coverage to avoid gaps in coverage and to ensure that your healthcare needs are met without breaking the bank.
In this post, we'll explore the four primary avenues to obtain health insurance before you’re eligible for Medicare:
COBRA,
Spouse or partner’s plan,
ACA Healthcare Marketplace
Private insurance.
Investing Success
Investing success is more a function of behavior than skill or technical ability. The context in which we’ve grown up, our past experiences, and the biases we carry shape how we measure success and profoundly influence our perception of risk.
This post focuses on what I think are the two most fundamental topics in all of investing:
The Risk/Return Tradeoff
The Behavior Gap
Social Security Strategies
The majority of Americans depend on two main sources of retirement income: their investment portfolio and their social security benefits. It’s no wonder then that the financial stability of this popular and important program is politically sacrosanct or that it receives so much media attention. And yet, so many Americans, (particularly those who rely most on the benefits), don’t have a good framework for making the optimal claiming strategy.
Cash is King
Liquidity refers to how quickly an asset can be converted to cash. Our financial lives depend on access to cash. Cash is king, whether it’s paper currency, figures in your checking account, or the ability to borrow it instantly with the swipe of a magnetized plastic rectangle.
This post explores what constitutes liquidity, why you need it, and how much you should have. There’s no right answer, only tradeoffs.
Making the most of your money
My friend Taylor and I were talking recently about why folks seek out financial advice, and he summed it up like this: "They want to feel like they are making the most of their money."
At first blush, it sounds like our job is to help people make more money, but that's not what he meant. Everyone wants to know that they're making good decisions with their money, that they're not missing out, that they’re not exposing themselves and their families to undue risk, and that they're not being taken advantage of.
How to find your financial purpose
Have you ever watched a new sport? One of the first things to understand is “How do you win?” meaning, what is the ultimate goal? Is it the highest score (e.g., football)? Lowest score (e.g., golf)? How do you score in the first place?
We rarely ask that about life itself. We live and then later look back, wondering what the hell we’ve been doing all these years. Read on to learn how to start asking— and answering— that question about life itself.
The 6 variables you can actually control
Personal finance can be overwhelming. Here’s the good news. There are only six variables you can actually control. Everything else is out of your hands. Do what you can with those six variables to give yourself the best chance of pursuing your financial purpose, and from there, life will be what it will be.
Roth Conversions in Retirement (A Case Study)
A couple of weeks ago, I wrote about the three tax landmines to watch out for in your retirement plan:
RMDS,
the “widow’s penalty”, and
beneficiary taxes.
If a significant portion of your retirement savings is in traditional IRAs or pre-tax 401k accounts, then you need a strategy to address all three. With proper planning, Roth conversions can neutralize all three tax traps. What follows is a case study to illustrate their utility.
Personal finance is simple, but hard
Personal finance is pretty simple. If you save 20% of your income, have proper liquidity, carry basic insurance (home, auto, liability, life, disability), and invest your long-term money in a low-cost diversified index fund (and don’t sell), you’ll probably be just fine.
While it may be that simple, it’s also hard.