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SteveDH, November 2013 Net Worth

This article was written by in Naked With Cash. 2 comments.

In Naked With Cash, seven anonymous Consumerism Commentary readers publicly track and analyze their finances on a monthly basis. For almost a decade, I tracked my own finances on Consumerism Commentary; now I’m sharing the benefits of public accountability with the participants. I’ve partnered with financial planners who will offer some guidance along the way. Read this introduction to learn more about the series.

SteveDH is retired, and he and his wife have two grown kids. By the time he retired in 2008, he had reached his retirement asset goal of $500,000. His goal now is to ensure his savings last as long as he does. Read his bio to learn more about SteveDH. SteveDH is on Team Roger, with Certified Financial Planner Roger Wohlner.

Keep reading to see his net worth report, updated for November 2013. This month’s theme is debt. You can read last month’s analysis here. Following the analysis from SteveDH, Roger Wohlner will offer his own thoughts and guidance.

Roger Wohlner, CFP appears courtesy of The Chicago Financial Planner.

Analysis and comments from SteveDH

Another good, albeit boring, month finance-wise. We had very little in the way of unrealized gains on our holdings but the cash flow remained positive. We had a nice trip to Kansas City and have probably completed 85% of our Christmas shopping. That pretty much sums it up.

I did get the preliminary copy of TurboTax, so I’ve done the math and made most of the tax-related decisions. I’ve decided there will be no Traditional-to-Roth IRA conversion this year as my analysis says the previous conversions have pushed the tax bracket issue out far enough that we shouldn’t have to worry about it for the next 10 years or so. That;s more than five years past required minimum distributions from the IRA.

That leaves plenty of time to make any adjustment if it becomes necessary. The added benefit to skipping the conversion is that approximately 56%, rather than 85%, of our Social Security income will be taxable this year. Looks like I might even get a sizable refund!

This month topic is debt — ugh. We didn’t carry any debt into retirement so I’ve been lucky enough to be able to just forget about debt for many years. Although I believe debt is necessary for buying a home or mitigating medical expenses there’s a lot of debt I don’t like. Many of the financial woes we see today can be traced back to Sears & Roebuck. They were the first to introduce unsecured debt to the general public. Their great idea of using little metal disks hung on a nail board is the genesis of every credit card we carry. Unsecured debt is generally bad and should be avoided given the opportunity.

OK, the Sears blame thing is a stretch –- but I really like it and it sounds good when I lecture the kids about credit cards being a great way to spend your money but a horrible way to borrow money.

December: The Holidays are always fun around here so we’re looking forward to them. Even the chaos provides us with great reminders of past Christmas events with family.

December finances are another matter. The end of the fourth quarter, the end of the year, the beginning of tax season, all bring about task involving Quicken, TurboTax, Excel, and lots of discussions to set goals, budgets, and plan for 2014 expenses and indulgences.

Although I really enjoy the exercises and the planning involved, the other “stakeholder of our enterprise” gets bored and often concludes with a “whatever” and a smile.

If you don’t understand the reference to stakeholder and enterprise I suggest you get a copy of The Family CFO. It has worked for us for many many years.

Feedback from Roger Wohlner, CFP

An excellent and boring report. I agree with your decision to stop the Roth conversions I generally am not a huge fan of doing this for someone in your age bracket. As usual, you seem to have your spending and all other aspects of your situation well under control.

Feedback from Luke Landes

I don’t think it’s that much of a stretch to attribute the prevalence of unsecured debt among the masses to Sears Roebuck. That being said, it was an ingenious idea and unsecured credit helped develop a strong middle class, which in turn helped the economy of this country explode. Marketing played a huge role in this as the middle class wanted to fulfill their American dream.

Unfortunately, credit didn’t come with education about managing money, and we’re still trying to catch up in that respect. Furthermore, I’m not sure that education, as we interpret the concept today, would have helped much. Logic has a hard time piercing emotions.

Your attitude towards debt has served you well, and as far as I can tell, you’re in the clear for the remainder of your retirement. Your retirement accounts are up for the year, avoiding depletion (at least in this year of nice stock market returns) and that’s a fantastic sign.

Updated May 5, 2014 and originally published December 27, 2013.

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About the author

Luke Landes is the founder of Consumerism Commentary. He has been blogging and writing for the internet since 1995 and has been building online communities since 1991. Find out more about Luke Landes and follow him on Twitter. View all articles by .

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avatar 1 Anonymous

I’m curious how the retirement account is invested. With November seeing the S&P up 25%+, and your retirement account showing 5.3%, I imagine it’s invested pretty conservatively, and there were withdrawals during the year.

As I approach my own full retirement and move away from 100% stocks, I need to adjust my expectations, and not expect S&P-.02%, but a lower number based on mix.

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avatar 2 Anonymous

Retirement accounts are indeed conservative. Across all three accounts we have an allocation profile of:
50% Fixed Income
34% Equities
16% Cash

We have not made any withdrawals in our first 6 years of retirement. Although one retirement account is a ROTH with no tax consequences we plan to hold off on any withdrawals until RMD – which will occur in 2018.

Although we take greater risk and see better returns within the Investments accounts, preservation of capital takes front-n-center within the retirement accounts.

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