Month: July 2026

Posted on

Future You Will Thank You

Let’s get practical for a bit and talk about retirement. For some, it’s a long way off. Others may have already begun.

While finances certainly aren’t the only consideration, they’re often the most important factor behind any given individual’s ability to move into retirement. This post isn’t going to solve all your retirement problems, but it might point you to a unique opportunity that will help you years from now.

For most people, an Individual Retirement Account (IRA) or a 401k through an employer are the most accessible ways of saving for retirement. That’s where you set aside a certain amount of pre-tax money from your paycheck into your retirement account. It saves you money on taxes right away (by reducing your taxable income), but you’ll have to pay taxes on it later. You invest it for years, and the balance (hopefully) grows, and then as you withdraw it from the account during retirement, Uncle Sam finally gets his bite at the apple.

On the flip side is something called a Roth IRA. This is a retirement account where you use money from your take-home pay (you’ve already paid taxes on it) to put in your retirement account. Your investments grow (hopefully) over time, and then when you need to start withdrawing money from that account in retirement, there’s no need to pay taxes on the withdrawals because you’ve funded the account using money that’s already been taxed.

Ideally you’d want a mix of both types of accounts as you approach retirement. Many people only have 401k assets. The tricky part about them is they’re a little misleading. Whatever balance you see in that account is not actually the amount you get to use for your expenses; depending on your tax bracket, Uncle Sam could take a huge bite (in addition to state taxes). One nice thing about a Roth IRA is that the amount you see in your account is what you get to keep (minus any fees from your administrator, etc.).

The biggest question then is: “should I invest in a 401k or in a Roth?” The mathematical answer is: it depends on when you’re likely to have the lower amount of taxable income; if you’re in the lower tax brackets right now (10-12%) and can afford to contribute to retirement accounts, pay your taxes now (use a Roth IRA). If you’re in a moderate or higher bracket right now and you expect to have lower taxable income in retirement, it probably makes sense to delay paying your taxes until you withdraw cash from the account (use a 401k or traditional IRA).

Early in this post, though, I mentioned a unique opportunity. Right now the U.S. probably has the lowest federal income tax rates we’re going to see for a very long time. With the amount of debt we as a nation are carrying right now, it actually doesn’t make sense that our income taxes are as low as they are. I personally find it difficult to believe I’ll ever see lower tax rates than what we currently have. If you believe politicians are more likely to raise future taxes than they are to lower them, you might consider doing what’s called a Roth conversion.

A Roth conversion is the process of converting pre-tax (401k/traditional IRA) retirement money into retirement money that won’t be taxed again. You’re essentially using a special maneuver to pay taxes on the money being converted, eliminating the need to pay taxes on that money in the future. You move the money administratively, and then you settle up with the tax man when you do your annual taxes by the following April 15th tax deadline. There are a few important things to keep in mind, though.

  1. Even though it’s for retirement, the amount of money you convert counts as taxable income during the tax year the conversion occurs. If you’re single and have $60,000 of taxable income, then you convert $10,000, not only is your taxable income now $70,000, but you’ve actually also elevated part of your income into the next tax bracket. For that demographic, income above $64,200 gets taxed at a higher rate. If you’re going to do a Roth conversion, keep an eye on what the conversion amount is going to do to your total taxable income for the year. You may want to strategically spread out the conversions over several different tax years.
  2. You should have cash on hand to pay the bill come tax time. Don’t try to convert a chunk and assume you’ll end up with a smaller percent of it because the taxes get withheld from it. It doesn’t work that way. It’s like any other reason you owe taxes come April 15…you need to pay what you owe, and you don’t ordinarily do it using retirement money. Only do a Roth conversion if you’re going to have cash on hand to pay the extra tax. If you’re in the 12% tax bracket, every $500 you can throw at a Roth conversion will get you $4,167. If you’re living in the 22% bracket that same $500 loses some oomph; in that bracket $500 will only get you $2,273. Before the tax rates we currently have, the 12% bracket would have been the 15% bracket (and you’d only have converted $3,333 rather than $4,167 for every $500) and the 22% bracket would have been the 25% bracket (netting only $2,000 instead of $2,273 for every $500 you spend).
  3. It’s probably not a good idea to convert 100% of your retirement assets into the Roth category. Even though you’d effectively have zero income to report to the IRS come tax time, the standard deduction still gives you some money tax free. For 2026, the standard deduction for single filers is $16,100 (and twice that for married filing jointly). If you spend the money to convert everything you’ve got into Roth assets, you’re foregoing an opportunity to get a free pass on that amount of taxable money. Married couples can take up to $32,200 from their 401k without paying any federal taxes, and then on top of that still have quite a bit of cap space to further convert additional assets to Roth at a low tax cost if they have spare cash on hand. Additionally, now through 2028, people 65 and older get an additional $6,000 deduction on their taxes. (You can also use charitable donations from your 401k/IRA to satisfy your Required Minimum Distributions (RMDs).
  4. This discussion is for federal taxes only; it doesn’t consider state taxes. States vary widely in their taxes, especially when it comes to determining whether or not to tax your social security benefits. Converting a big chunk of retirement money might force you to pay taxes on your social security when you otherwise wouldn’t have needed to, or increase your out-of-pocket Medicare costs, and that’s probably moving you in the wrong direction.
  5. Talk to a professional advisor/tax preparer to get the best advice on your particular situation.
Posted on

I’m In Over My Head (But This Time it’s on Purpose)

You gotta have fun at work, man. I know not every job is amazing, but it’s the people that make all the difference. You often spend more of your waking hours with your coworkers than you do with your own family. Might as well try to have some fun in the process, right?

It’s been awhile since I had this kind of fun at work, but back when I worked as a lifeguard, we’d spend the morning cleaning the pools, swimming laps, practicing rescue techniques, doing chemical treatments, straightening up chairs, mowing the grass, doing preventative maintenance, etc., and then we’d open the pool in the afternoons. But sometimes…we’d just plain goof off.

Right around that time, disposable underwater cameras hit the market. I think I grabbed one or two each year I worked as a lifeguard, and we usually came up with some wacky stuff. Pictures started out pretty generic and got more creative or complex over time. At first they’d just have one or two people in them, doing a stupid pose in shallow water.

Then we got more ambitious and brought in more people or prepared more elaborate setups. In the course of doing do, we learned a few things. We learned the best pictures came when the photographer didn’t let their own bubbles get in front of the camera. We learned the more people you were trying to pose, the trickier it became to get them all into position at the desired time. Some people couldn’t hold their breath very long, other people took such a huge breath that they’d start floating to the surface before the picture got snapped. We had two different pools, and we normally did pictures in whichever one had the better water clarity. If that happened to be the deep pool, we also learned it was tricky to get everyone all the way to the bottom and have them stay there for long.

I’m not suggesting you organize a pool party with your coworkers (I mean, unless you want to). I’m saying as long as you’re getting your work done, try to have a little fun in the process. Morale counts for a lot. The person you’re working with is probably not going to become your best friend, but if you can improve things from “bristling at the sight of them” to “getting along with them” or “laughing along with them,” your work day is going to go a lot better. Similarly, imagine how much better things would be if you can graduate from “counting down the days until retirement” to “eh, it’s not so bad” or better yet “yeah, parts of the job aren’t great, but the people make it alright overall.” Anticipating the drudgery of work will suck the life out of you. The whole equation changes when your workplace isn’t a place you dread.

Posted on

Happy 250th Birthday to the Good Ol’ US of A!

On Saturday we’ll celebrate America’s 250th birthday! I’m sure you’ve heard it, but let’s take time to recognize that we live in a pretty great place that’s the envy of the world, and it’s okay to spend some time celebrating this great nation.

I got a little curious about how old other countries are, and where the U.S. falls in that list. Without sounding too much like a book report, it turns out the average age of countries in the world is a bit under 160 years. If we listed all of the UN’s 193 countries by age, the U.S., surprisingly, is older than 170 of them.

Sadly, the percentage of folks who are proud to be Americans has been on the decline lately. While I’d attribute that to a variety of things, I think it’s time for a little reminder about some of the things that help make America special.

While there’s no single thing that sets the U.S.’s style of government apart from all others, there is a very important combination that helps distinguish it from others.

  • The U.S. Constitution (1789) is the world’s oldest written national constitution still in force. Many older countries have rewritten their constitution multiple times.
  • The U.S. has a more rigid separation of government branches than most nations, providing more stringent checks and balances on any one branch’s power.
  • We’ve got a strong Federal system in addition to independent State governments. The Federal Government cannot simply abolish or overrule certain aspects of State Governments. States have their own constitutions, legislatures, and laws that vary across state borders.
  • It’s hard to amend our constitution. There has to be very broad agreement to pass an amendment, (two-thirds of both houses of Congress or a convention called by two-thirds of the states, and ratification by three-fourths of the states). In addition to the 10 amendments in the Bill of Rights, there have only been 17 other constitutional amendments since the Constitution was written.

This style of governance has proven flexible enough for the country to survive numerous peaceful transitions of power, a civil war, multiple government overhauls, various government shutdowns, natural disasters, two World Wars, a decades-long Cold War, and a host of smaller crises. The government is intentionally slow and demands broad agreement to take any action, preventing an erratic establishment of laws. So while it can move frustratingly slow, that’s part of the key to its flexibility and success.

What about the way this translates to the lives of everyday people?

We’re a Capitalist society. That means when it comes to earning money, you’re free to either work for an already-established business (the route most people take), or strike out on your own to provide goods or services you believe others will pay for (if you’ve got a good idea, have the means to do some prototyping, and are willing to bet on yourself, you have a potential pathway to building a successful business). The market is not forgiving or kind, but it leads to businesses that can adapt and provide things people are truly willing to part with their money for.

Obviously, we’re not perfect. It’s very expensive to buy or rent a place to live here. Political gridlock is at an all-time high while approval for politicians is at an all-time low. People believe their intense anger justifies the harming of other people or gives them permission to infringe on others’ rights. Any time you have people with diverse schools of thought, you’re going to have disagreement, and the scope, manner, and intensity of that discord manifests itself in different ways. We’re still the envy of the world. Other countries and other people want what we have. It’s very easy these days to find Americans who are dissatisfied with their nation, but you’ll notice it’s not so terrible for them that other countries become more appealing to move to.

We’re moving into a period in history where there are new challenges, new threats, and different types of instability in a multipolar world. It’s no longer the US vs. the Soviet Union; it’s varieties of alliances and “sometimes” partnerships that make governing more difficult and complex. That’s probably something that’s not going to get any simpler anytime soon.

In the meantime, let’s be grateful for the blessings we enjoy here in the U.S. We have clean, potable water in every zip code in the country. Americans have an extremely low chance of dying from starvation. Very high percentages of the population have access to hospitals, emergency services, the internet, cell phone service, reliable food sources, ranch dressing, and Amazon/Walmart delivery. It’s not like that in many places in the world.

We’re not perfect as a nation, but we’re blessed to live here. As we move beyond 250 years as a nation, let’s be thankful for each other, the freedoms and privileges we enjoy, and the fact that we get to argue about ideas rather than necessities. Let’s be tolerant of ideas we don’t always agree with, but not manufactured or manipulative rage. It’s okay to disagree, but it’s not okay to belittle the people who hold to principles differing from yours. Let’s return to having a civil discourse, criticizing ideas instead of people, intolerance of prejudice (sexism, classism, racism of all types, ageism, etc.), and working hard not only to get ahead, but to make your community and country better. If you’re American, the American flag should be something you can be proud of and be united behind. “United we stand, divided we fall.”

Happy birthday USA, and thanks for everything so far!