It has been almost one year since the Federal Reserve began its historic fight on inflation, ratcheting up its benchmark interest rate and shedding some of its inflated (no pun intended) balance sheet. Progress has run up against supply chain bottlenecks and a resilient consumer. The Fed’s goal is to get the Personal Consumer Expenditures (PCE) deflator down to 2% from a June 2022 high of 7%. PCE prices increased 5.4% in January, leaving the Fed’s job less than halfway done.

So, what’s the rub? Energy and food prices continue to feel pressure from the war in Ukraine and while core goods prices have come down off the peak, the prices of services like rent remain stubbornly high. The Fed must   weigh the benefits of lowering inflation with the costs of harming the economy. We will likely have to see an end to the war in Ukraine (to lower food and energy prices) and an increase in unemployment (to ease wage inflation) for the Fed to accomplish its goal. One thing is for sure, inflation is not going without a fight.


Each year, the Employee Benefit Research Institute (EBRI) does a study to determine the amount of money a 65-year-old retiree should have set aside for healthcare. An average married couple age 65 need $318,000 to have a 90% chance of covering these costs. If they require prescription medication, the price jumps to $383,000. A single female would need $197,000 and a single male would need $166,000.

Last year Medicare Advantage, not Medicare, insured over 50% of seniors. Those folks will only need about 57% of those numbers. If you need help with Medicare, Medicare Advantage, or Medicare supplements, let us know and we will refer you to a professional in the field.


You might wonder what all the hoopla is over Congress’s latest proposal to impose a national sales tax. After all, 45 of our 50 states collect sales taxes. An additional 170 different countries collect something similar: a value-added tax assessed on different purchases across the supply chain for manufactured articles and digital services. Those taxes are ultimately passed to the consumer.

The proposal (codified in the Fair Tax Act) was introduced in the House of Representatives on January 10 and would eliminate all income taxes, payroll taxes, and corporate taxes, as well as the Internal Revenue Service (IRS). It would replace those lost revenues with a tax on every item sold in the U.S., which has variably been reported to be 23% or 30%. The plan was created during the Reagan presidency and has been floating on the margins of political respectability ever since.

There are several challenges to implementing a national sales tax. The bill would require each state to collect the actual sales tax within their boundaries (including, of course, the five states that don’t administer a sales tax). However, the states would only receive one quarter of one percent of the collected revenue for the trouble. Instead of an IRS, you would have 50 states with their own underfunded collection bureaucracies.

The political challenge is more problematic. The headlines today are talking about the high cost of goods and services and the overall inflation rate. Making things more costly for consumers in a highly-visible way—right there on the price tags—might not be a popular idea at this time. Moreover, the 23% rate that the sponsors are pushing is not entirely accurate. The proposal would impose a $30 national sales tax on every $100 that you spend, which, if you don’t have a calculator handy, comes to a 30% price increase, and should probably be referred to as a 30% tax. The 23% figure comes when someone says that $30 is just 23 percent of the $130 amount that the consumer is paying, which seems to be a sly mathematical sleight of hand.

Then, there’s the fairness angle. The sales tax would fall most heavily on people who spend most of their income on goods and services— like food, transportation, clothing, and the roof over their heads.  People with more space between what they earn and what they have to spend on essentials would escape taxation on that ‘discretionary’ income.  The ‘fair tax’ would be a gift to wealthier individuals, who could simply stash away a big chunk of their earnings untouched by government hands. Meanwhile, corporations would escape taxation altogether except for the things that they buy.

Finally, would the proposed sales tax replace the revenues generated by the various taxes we have on the books today? Probably not. A 2004 study from the Tax Policy Center estimated that we would need a national sales tax rate of 60% to generate the current level of tax income collected by the federal government. So, if the proposal passed, it would lead to tax increases in the future.

The ‘fair tax’ stands very little chance of passing in the House of Representatives, or in the Senate or signed into law by a Democratic president. But you will see something like this proposal come up again and again in the future, and who knows? While we hope this tax never sees the light of day, perhaps one day the political winds will blow it into law.





LIMRA recently surveyed a large group of households between the ages of 40-85 with $100,000 or more in savings for retirement. The level of optimism among this group about having enough money in retirement was dramatically higher for those with $2 million or more of savings. At this level, 83% said that they strongly (51%) or somewhat (32%) agreed that they would not run out of money by age 90, while for those between $1-2 million, the same numbers were 28% and 42%. It all sinks lower with lower asset levels. Of course, much of how you “feel” is dependent on your lifestyle. There are several issues with the potential false feeling of security. First, only 7% of the households surveyed over the age of 60 had the magic number. Next, even those folks may take a different view if asked about age 100 which is the fastest growing age cohort. Thirdly, the survey was done before inflation and the declining market fully showed themselves.


An educated society is in a far better place than one that is not. A person who does not graduate from high school earns about $10,000 less per year than an individual with a high school diploma. A person who graduates with a high school diploma earns about $36,000 less per year than one with a college degree according to Graduate Alliance.

But it isn’t all about money. 80% of those that are in prison are high school dropouts and they are much more likely to be on some form of welfare. Further, without access to good health care, they need more medical attention and die at an earlier age. Thus, those blessed with a better education should have a leg up. According to WalletHub here are the top ten states with the best education based on 18 factors:

10) Utah

  9) Minnesota

  8) New Hampshire

  7) Virginia

  6) New Jersey

  5) Colorado

  4) Vermont

  3) Connecticut

  2) Maryland

  1) Massachusetts



Last week, Fidelity released investment results for the 401k plan assets under their management and the picture isn’t a pretty one. The average account dropped about 20% taking the average from a little over $120,000 to just above $100,000. When you consider that the S&P 500 was down about the same amount, that the NASDAQ was down over 30% and bonds were down 11%, it isn’t too surprising. The S&P 500 will have to go up by 25% to just get back to even. But the downturn demonstrated itself in a significant way as Fidelity also reported the number of $1 million accounts declined from 442,000 to 299,000 for a drop of 32%!



Over the years, we have shared the best places to retire both in and out of the United States. But where are the places you might want to avoid? According to WalletHub, here are the ten worst states based on affordability, health care, and quality of life:

10) Arkansas

  9) Maryland

  8) Washington

  7) Illinois

  6) Louisiana

  5) New York

  4) Oklahoma

  3) Mississippi

  2) New Jersey

  1) Kentucky