11 Mar 2024

Understanding New Rules: 529 Plan to Roth IRA Conversions

I’ve said for some time that college planning is hard. I discovered this the hard way, through my own situation. Both of my daughters are in college now, and I started 529 accounts for each of them the year they were born. I got a little tax deduction and the benefit of tax-free growth. When my older daughter was a freshman in high school, I realized the problem: even though… Read More

By David Ott Tags: , , , , , , , ,
17 Jul 2023

You Better Think (think!) About Estate Planning

The Queen of Soul, Aretha Franklin, died in August 2018. Five years later, the battle over her estate ended after a two-day lawsuit that should allow her estate to finally settle. At issue was that Franklin left two wills behind, both handwritten (one tucked in a notebook under a couch cushion), and they were contradictory. Initially, her four surviving adult children thought there was no will since they couldn’t find… Read More

By David Ott Tags: , , , , ,
6 Jun 2022

The Second-Most Important Element of Retirement Planning

I’ve focused on bear markets for the last two weeks because the stock market briefly dipped into bear market territory a few weeks ago. Since then, markets have recovered some of what was lost, although there is still a way to go to get back to even. One of my colleagues pointed out that as long as your portfolio could reliably provide the cash flow that you need to live… Read More

By David Ott Tags: , , , , ,
14 Mar 2022

The High Cost of Hedging

When markets are falling, clients often ask about whether certain ‘risk mitigation’ strategies make sense. Mitigation isn’t a word you use every day unless you’re a lawyer or in the insurance industry, but the meaning is simple: it is an action that reduces the severity, seriousness, or painfulness of something. Usually, when someone talks about it from an investment standpoint, they usually mean some kind of complicated hedging strategy. Over… Read More

By David Ott Tags: , , , , , , , , ,
7 Jun 2021

Drawdowns in Retirement

This past week, I was meeting with a client and the discussion turned to the low yield bond environment. The client has a pretty common question – isn’t there something that yields more? The answer is yes, there are a lot of things that yield more than the investment-grade bond market. We could buy junk bonds, emerging markets bonds, or other questionable issuers. These kinds of bonds aren’t inherently bad,… Read More

By David Ott Tags: , , , , , , ,
22 Mar 2021

Roth 401k Considerations

People frequently ask me if they should use contribute to their ‘regular’ IRA or their Roth IRA. I’m usually wishy-washy in my answer because it depends on a variety of factors, including things that are simply unknowable. Before getting into whether you should or shouldn’t consider the Roth option, let’s review the basics. A ‘regular’ 401k (as people often refer to it when talking to me), is the traditional savings… Read More

By David Ott Tags: , , ,
4 Mar 2019

Stretching Your Dollars, Here and Abroad

Many years ago, I somehow discovered a newsletter called International Living that showed how you could retire overseas and live well without a ton of money. The basic idea was that your Social Security check would go a lot further in Prague than in Philadelphia. The magazine (and now website www.internationalliving.com) always featured beautiful photographs of unspoiled beaches in Costa Rica, wandering streets of old Italian villages and had the feeling of a travel brochure… Read More

By David Ott Tags: , , , ,
28 Jan 2019

Lessons From the Shutdown

The big news on Friday was an agreement between The White House and Congressional leaders to reopen the government until mid-February to allow border negotiations to continue. Whatever you feel about President Trump, Speaker Pelosi, the shut-down, ‘The Wall,’ or any other hot-button that’s sure to upset someone, there is a salient, non-partisan lesson that’s worth noting: the importance of either maintaining an emergency fund or sufficient liquidity. Although financial… Read More

By David Ott Tags: , , , ,
10 Sep 2018

How Much Will Retirement Cost? The WSJ May be Wrong

One of my favorite writers and thinkers is a behavioral economist named Dan Ariely. I heard him speak at a conference years ago, read his first book Predictably Irrational and am about half way through his most recent book, Dollars and Sense. It may be a little hard to tell from the photo, but if you look closely, you can see that his face is disfigured from a third-degree burn… Read More

By David Ott Tags: , , , ,