About a month ago, Max got motivated and calculated his Average Indexed Monthly Earnings (AIME) for 2021. I found the calculation simple, and basic arithmetic got us a value. In short, we averaged 35 years of my earnings history and adjusted it to the current years’ dollars. At the end of 2021, my AIME will come in at $2,940. That comes to $35,280 annually. If $35,280 seems low, that’s because it is. I make much...
Max recently blew past another financial milestone. By the end of 2021, the Social Security Administration will have taxed me on just over a million dollars in earnings. If we adjust all those years of wages for inflation, we are looking at about $1.2 million in taxed earnings. Over my entire working years, the total tax out of my pocket will come out to about $66,017 by the end of 2021. A $66,000 contribution to...
How can you tell if someone is in poverty? It’s not an easy question. But we do have some guidelines. The Max Out of Pocket crew would meet the federal poverty guideline if we had an annual income of less than $17,420. That’s according to the Department of Health and Human Services (HHS). They will bump that figure to $21,960 in a few weeks when little Max or Maxine arrives and we turn into a family of three....
It’s pretty simple. Max trades his time, energy, and skills to an organization. In exchange, I expect that organization to pay me money. We sometimes refer to this as earned wages. But before it hits my pocket, my Uncle Sam takes his share. He calls it wages, salaries, and tips. These wages hit Line 1 of the 1040 tax form, and the government taxes us from there. Whatever money is left lands in my pocket....
Over the years, I have seen several investment experts suggest they are ‘tilting’ their portfolio one way or another. It sounds sophisticated. They might generally follow total stock market indexing principles, but they deviate ever so slightly into a certain strategy. They tilt their way into ‘international equities,’ ‘value stocks,’ or even ‘alternatives.’ Tilt: move or cause to move into a sloping position. As they tout their tilt, I sometimes have a hard time reading...