Wealth and Wisdom: Week of June 5, 2023
I hope we’ve all learned an important lesson these last few weeks: any “crisis” that can be ended with a simple majority vote in Congress is actually no crisis at all.
No, the United States did not default on its debt. The financial markets did not collapse. And the world did not stop spinning on its axis. The government will continue printing, borrowing, and spending money for two more years. This was a political event, not an economic catastrophe. Everyone involved knew it, but that didn’t stop them from trying to scare us for no reason.
The markets didn’t fall for it, by the way. In fact, it’s instructive to look back at stock prices the last two times we had a debt ceiling “crisis.” On July 31, 2011, a Republican Congress reached a last-minute deal with President Obama. The S&P 500 closed that day at 1,293.
Just two years later, another standoff between Obama and Republican lawmakers. That one ended on October 17, 2013 with the S&P at 1,733.
President Biden and Speaker McCarthy agreed over the Memorial Day weekend to kick the can down the road another two years. And on the next day of trading, the index closed at 4,205.
It appears someone forgot to tell long-term investors the world was about to end.
We’re pricing kids out of a college education
Traditional college enrollment is steadily declining in the U.S., despite proven benefits. Blame it on unjustifiable rising costs and ballooning debt. (Reading time: 3 minutes)
Americans are retiring later now
The average worker now plans to retire at age 65 – thanks to the pandemic, inflation, and an uncertain economy. (Reading time: 2 minutes)
Will you move after you retire?
Whether it’s to be closer to family, save money, or stay warmer in the winter – each scenario has its own pros and cons. (Reading time: 6 minutes)
Handling retirement accounts when you change jobs
You’ve got several options for your 401(k) or similar plan when you retire or make a career change. (Reading time: 4 minutes)
Should you contribute to your 401(k) after-tax?
It’s not for everyone, but there are at least two circumstances where it might make sense to save on an after-tax basis. (Reading time: 6 minutes)
How to handle RMDs
The law requires you to start withdrawing from traditional IRAs and 401(k)s at age 73 and paying taxes on them. But there are ways to limit the hit. (Reading time: 5 minutes)
Saving Social Security
Balancing the books might not be as difficult as we’ve been told – but the longer lawmakers wait, the more expensive it will be. (Reading time: 5 minutes)
A clever way to save for emergencies
Setting aside a large sum of money can be an intimidating task. The secret might be to think small and save just a few dollars every day. (Reading time: 2 minutes)
Buy or lease your next car?
Leasing has gained in popularity since the pandemic. Here’s how to decide if it makes sense for you. (Reading time: 4 minutes)
Companies with the best reputations
When it comes to ranking brands by reputation, even the loathed airlines come out ahead of Meta, Twitter, and TikTok. (Reading time: 1 minutes)
Words to the Wise
“When you could pay your way through college by waiting tables, the idea that you should ‘study what interests you’ was more viable then it is today, when the cost of a four-year degree often runs six figures. For an 18-year-old, investing such a sum in an education without payoff makes no more sense than buying a Ferrari on credit.”
– Glenn Harlan Reynolds
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