Getting the Most Out of Your Marginal Decade

As an estate planning attorney my focus is on something many people don’t like to talk about: Their inevitable demise. I make them talk about it and plan for it and the result is almost always a lot of relief.

Despite similar reservations, your marginal decade is also something you need to focus on to make it as pleasurable as possible. Popularized by Dr. Peter Attia, a physician who specializes in longevity, your marginal decade is the final 10 years of your life. It’s important because it is during that decade that most people are likely to experience significant declines in physical and cognitive function. But that’s not a preordained condition. You can protect your assets with a good estate plan; and you can put together a mental and physical health plan to make the most out of the last 10 years of your life. Of course, no one knows when they’ve entered their marginal decade, but it’s never too soon to plan for it. By observing ageing clients over three decades I have personally witnessed the positive impact that mental and physical health planning can have on people.

Preparing for your marginal decade is all about lifestyle choices. There are many exceptional people in their 80s, 90s and beyond. Almost all of them make conscious choices that affect their quality of life. It isn’t just genes or happenstance.

Here are some very important factors to consider:

1. Whether you think it’s decades away or you’ve already entered it, it’s important to plan for what you want your marginal decade to look like. Dr. Attia calls this “back casting.” Come up with what you want to do in the last decade of your life and then work backwards to make that happen. Be able to hold your grandchildren or great-grandchildren. Climb the stands at Comerica Park to catch a baseball game. Play 18 holes of golf and then go back out for 9 more (just ask my wife). Travel to a foreign land. The options are limitless.
2. From the physical side, you need to make sure you have an aggressive plan that includes regular exercise, good nutrition and proper sleep. Regardless of your physical limitations there is a plan out there that you can use. One of the strongest predictors of quality of life and longevity is VO2 max, which is the measure of how efficiently your body uses oxygen that it takes in. Find an aerobic activity to get your heart pumping within your limits. Walking, running and if you can do it, interval training, will increase your VO2 max.
3. Work on your balance to minimize your risk of a devastating fall. Start with something simple like balancing on one leg for 30 seconds or a minute. Once you’ve mastered that, go to Amazon and look for some equipment that focuses on balance. Take a look at the Wanyida ankle and foot strengthener. It’s great for balance and ankle strength.
4. Believe it or not, your grip strength is a very accurate measure of longevity. It is directly linked to your quality of life as you age. It reflects your overall muscle condition and is a lifesaver if you start to fall and need to catch yourself. Start simple but make sure you increase the strength of your grip. A good start is to squeeze a tennis ball.
5. Eat right. You know what your food weakness is. Get control over it and keep your weight down.
6. Socialize. It’s so important to have strong relationships as you age. It has both a physical and mental component and so make sure you find opportunities to consistently interact with others. Loneliness and isolation are now viewed as serious health risks later in life.

When I do retirement planning analyses for my clients I assume they are going to live well into their 90s. I will do my part to make sure your money lasts that long. I only ask that you do your part to make sure that your quality of life is as good as it can be in your marginal decade.

Fun fact: I’m sure you’ve heard about the world’s oldest living person, but do you know about the oldest living animal ever discovered? It is a quahog clam named Ming estimated to be 507 years old when found living on a seabed off the coast of Iceland. Researchers found the clam in 2006. It was estimated to be born in 1499 during the Chinese Ming Dynasty. Researchers counted the rings on its shell like how you count rings on a tree to determine age.

The End of an Era

Warren Buffett is passing the torch. At 94 years old and after delivering extra ordinary investment returns for 60 years, he announced last weekend that he will step down as CEO of Berkshire Hathaway and turn the reigns over to Greg Abel beginning next year. Warren Buffett has been called the epic compounding machine because each dollar he started with at the beginning of his investment career is worth about $365,000 today. $1,000 invested in his Berkshire Hathaway stock in 1964 is worth now about $13 million.

Regardless of your financial acumen and interest in business, the fact that you know who Warren Buffett is tells you all you need to know about his success. He has been to investing what Michael Jordan was to basketball, Muhammad Ali was to boxing and Marie Curie was to physics and chemistry: a once-in-a-lifetime star.

Warren Buffett’s success as an astute investor has been studied and dissected for decades; with the goal of uncovering the “secret” he must harbor away. I view him differently. I believe he was a great investor because of his timeless life philosophy. The same things that make people great at living life make them great investors, and Buffett’s advice spanned all elements of finding personal success. To prove my point, here are some of his quotes on all sorts of life challenges:

• On education and self-improvement: “The best investment you can make, is an investment in yourself… The more you learn, the more you’ll earn.”
• On budgeting: “Do not save what is left after spending, but spend what is left after saving.”
• On emotional intelligence: “If you cannot control your emotions, you cannot control your money” (I believe you can replace “money” with “relationships”, “professional success” and any number of important goals).
• On the company you keep: “Look for three things in a person. Intelligence, energy, and integrity. If they don’t have the last one, don’t even bother with the first two.”
• On keeping it simple: “You don’t need to have extraordinary effort to achieve extraordinary results. You just need to do ordinary, everyday things exceptionally well.”
• On procrastination: “The only question is whether you’re going to do it today or tomorrow. If you keep saying you’re going to do it tomorrow, you’ll never do it. You have to get on it today.
• On how to approach any type of risk in your life: “Never test the depth of a river with both feet.”

Humble, brilliant, patient, kind. Warren Buffett has always been about the greatest of human attributes. Investment success is simply a byproduct of a proper life philosophy.

Fun Fact: Warren Buffett and his wife live in the same home in Omaha, Nebraska that he purchased in 1956 for $31,500. I suspect there have been some home improvements since that time.

A Brief Guide to Roth IRAs

Individual Retirement Accounts (IRAs) are popular and there are multiple varieties: traditional, rollover, inherited, to name a few. Today I focus on the Roth IRA, which is unique in how it grows tax-free. As we age and move into retirement, distributions that affect income taxes can be a concern. Traditional IRAs and 401ks require you to distribute a taxable amount each year in retirement, which adds directly to your income tax liability. The higher your income tax liability, the more likely that your Social Security will be taxed and your Medicare Part B premium will be increased. Unlike traditional IRAs, withdrawals from Roth IRAs are tax free and thus don’t impact Social Security or Medicare premiums.

There are whole books written on Roth IRAs and the strategies associated therewith. My goal below is to just give you some basic facts that may intrigue you to ask more questions:

1. Unlike traditional IRAs that are funded with pre-tax amounts, Roth IRAs are funded with after-tax amounts and thereafter allowed to grow tax-free. Pay the tax now and fund a Roth IRA vs. delay the tax until later and fund a traditional IRA.
2. Unlike traditional IRAs, there are no required minimum distributions from Roth IRAs for the original owner. Beneficial owners after the death of the original owner do have a 10-year time limit to fully withdraw the funds from the Roth IRA but there’s no tax associated with the withdrawal.
3. There are contribution limits to a Roth IRA. First, you can only contribute an amount equal to or less than your earned income for the year. For 2025 the contribution limit is $7,000 if you’re under 50 and $8,000 if you’re over 50. There’s also a phaseout on your ability to contribute that begins at $150,000 for single filers and $236,000 for married couples filing jointly. For high earners there still may be ways to get around the income limits (see paragraph 5 below).
4. Employer Roth IRAs through a 401(k) plan are becoming more popular. If your employer offers one, the 2025 total employee and employer contribution limit is $70,000 and the employee portion is based on age: $23,500 if under 50, $31,000 if 50 or older, and (just to make things more complicated) there is also a “super” catch up rule for those age 60 to 63 that allows for a $34,250 employee contribution. All those limits are subject to the company 401k plan rules.
5. Outside of a traditional Roth or a 401(k) Roth, there is also the area of Roth conversions. Basically, it’s a process in which you take money that you contributed pre-tax to a traditional IRA and “convert” it to a Roth IRA after paying taxes on the amount converted. Subsets of the Roth IRA conversion have fancy names like the “Back Door Roth Conversion” and the “Mega Back Door Roth Conversion.” The concept is similar in that you are putting money into a traditional IRA or 401(k) and then converting it to a Roth. High earners can use these “back door” approaches to get around contribution limits.  There are several factors to consider in deciding if a Roth conversion is right for you. They include relative marginal income tax rates now and in the future, whether you are in your highest income earning years, and the amount you currently have in tax-deferred traditional IRAs. Since you must pay taxes on the conversion, the source of outside funds available to pay the taxes is also a factor. Note though you cannot make a Roth conversion with an IRA you inherited from someone else. It has to be your original traditional IRA.
6. There are limits to withdrawals from Roth IRAs and their complexity is beyond this weekly newsletter. Many people who look into Roths come across the five-year rule that says you will be penalized if you withdraw funds from the Roth IRA within five years of its creation. That rule is commonly misunderstood. The rule only applies to the growth in the Roth IRA. Your original contribution amount can be withdrawn at any time without a penalty or a tax. Note there are different rules for withdrawals from 401(k) Roths that aren’t so accommodating.

Roth IRAs have their place in an investment portfolio because of their tax-free nature and avoidance of required minimum distributions. However, there are many factors to weigh before determining if a Roth is right for you. The younger you are, the better the Roth option becomes. If you have a friend or loved one in their teens who has a basic job, a wonderful gift is to open a Roth IRA and contribute an amount that equals their wages for the year. Just think of the growth over decades tax-free.

Fun fact: I hope you’ve been following my beloved Pistons basketball team. They are in a playoff dogfight with the New York Knicks and growing into seasoned competitors. The Pistons have won 3 world championships: 1989, 1990 and 2004. They are slowly getting closer to their 4^th!