November 28, 2014

A First Look At Next Year's Budget

Making budget decisions can be quite complex
The New Year is a little over a month away, so it is certainly not too early for me to review how how well my 2014 budget held up to our actual expenses and make adjustments for next year. I have lived with a budget for the last 40 some years. 2015 will be no different. 

This was a year of some significant changes: it was the first year I had Medicare coverage for about half the year and Betty purchased health insurance through the government healthcare marketplace. It was the first time we were away from Phoenix for part of the summer. We bought a new car to serve as my primary vehicle and to tow behind our RV. 

So, how did things work out? Pretty well, it appears. I am on track to be about 7% under budget for this year. A quick disclaimer: RV and vacation expenses are part of a separate budget. As I have noted in an earlier post the cost of gas during our 2 month RV adventure and a much higher than expected bill for repairs and maintenance knocked that budget for a loop (29% over). But, the main household budget did well.

What came in under budget:

1) Home Maintenance and repairs - usually there is a few things that go wrong with a 30 year old house. This year everything held together.

2) Medical lab tests - three of the tests Betty and I usually get and pay for are now covered by ACA or Medicare.

3) Pet Expenses - 2013 was not a good year for Bailey: a doggie chiropractor and several x-rays for a troublesome back problem. This year, she has been much, much better.

4) Dining out and entertainment - we found that we are spending more time with family and in-laws, which besides being more satisfying is much cheaper.

5) Betty's car's registration and gas expenses - an 11 year old car doesn't cost much to register, plus it is only driven about 5,000 miles a year. We are putting no more repair money into it but will drive it until it quits, then donate it to a charity.

6) Change in RV insurance - this one part of ownership I keep under an insurance heading in the household budget. By switching companies I was able to pay for only when I expect to be on the road next year, thereby saving $250.

And on the not so good side:

1) Real Estate taxes - even though real estate assessments lag by two years, our home's market value has rebounded strongly from the 2008-2009 disaster, making for a larger tax bill than I had planned for.

2) Yard work - while we were gone for July and August, I paid our yard service several hundred dollars above budget to do the trimming that I normally handle.

3) New set of eyeglasses: I thought I could make it until next year with my old lenses, but the change in my eyesight made a new pair important.

So, for 2015, with our income remaining unchanged, I will:

A) Trim the pet budget by 20%

B) Set aside enough to handle one or two major home fix ups, but not three.

C) Budget more for medical premiums. Betty's ACA plan will be about $37 more each month than this year, with somewhat higher copays and a much bigger deductible.

D) Trim the dining out amount a bit to reflect more family time.

E) Budget more for the real estate tax since it is bound to go up again.

All of this should allow us to stay at a 3% (or less) withdrawal rate from our retirement account and still be prepared for most of what 2015 may decide to throw at us.

How about your expenses for next year...anything lurking in the shadows?

November 25, 2014

2014: What Do We Have To Be Thankful About?

If you spend enough time with social media, cable TV news channels, newspapers, or on the Internet, the title of this post seems like a reasonable question. Between the mess that is the Mideast, Ebola, political dysfunction, and the general tension of 21st century living, Thanksgiving may seem like an anachronism: a pleasant idea that lives on more in memory than reality.

I disagree.  In America we have survived yet another election cycle with all the drama and cynicism that implies. The results were not pleasing to many, full of joy for others. But, we all woke up on November 5th, complained or rejoiced, and got back to living our lives. As much as politicians like to think what they do is critical to each one of us every waking moment of our lives, most of us spend our days with the political circus far in the background. Their "games" effect us in the long term, but for the most part they occupy their own world.

The fact that we had a contentious election and the country moves forward is the important reminder of our system. With the next presidential election less than two years away, the fun is about to begin again in earnest. It all may be infuriating, silly and wasteful, and often downright counter intuitive to common sense and logic, but there are no coups, insurrections, or massive social upheavals on the horizon.

In two years the country might turn the House and Senate back to the Democrats, not because they have all the answers, but because the public is always ready to "throw the bums out" regardless of who the bums are. That is just the way it is.

Personally, life couldn't be better. My wife and I not only survived but thrived during two months together in an RV this summer. We found new sides to each other, relished the time disconnected from normal distractions and connections, and saw beautiful parts of our country. We also learned being away from family for two months is our limit. 

My dad remains physically healthy. While his short term memory can be measured in days (sometimes hours, it seems) he enjoys getting together for lunch every few weeks and is generally upbeat. A new set of hearing aids seems to have helped his ability to participate in conversations.

Our daughters, a son-in-law and grandkids are happy and doing well. We spend time together frequently and enjoy each others' company.

I have had a series of medical tests provided by Medicare that don't reveal any issues of concern. My overall health remains good.

Financially, I remain on solid ground with no concerns. Betty and I are comfortable with our lifestyle and how we manage our resources. A summer in Portland is planned for next year and a trip to Europe for our 40th wedding anniversary in 2016 looks doable. 

This blog is doing well and remains fun and engaging for me and several thousand readers every day. I am moving forward on a third book that should be published sometime next spring. 

So, what do I have to be thankful for in 2014.....everything. 

I sincerely hope that your Thanksgiving review shows your life to be bountiful and satisfying. Perfect? Probably not. Better than many? Quite likely. 


November 14, 2014

When Life Shrinks Your Glass - Get A Smaller Glass

An astute reader left a comment a month or so ago on a previous post. She noted she is a glass half-full kind of person rather than one who sees the glass of her life as half-empty. Then, she added a thought that I loved: if life has suddenly become more of a struggle because of some problem, rather than switch to a pessimistic view, she simply envisions a smaller glass...which is still half full.

I have written a lot about attitude and retirement. There should be little doubt as to which side of the half glass side I am on. But, her comment gave me new insight into how to react to the inevitable stumbles and problems we will all encounter during this stage of life.

Now matter how well you have prepared, how many hours you spend in the gym, how much you exercise your mind, and how many roses you buy your spouse, you are going to go off the rails at some point. It may be a series of small detours that eventually allow you back on track. Or, the derailing may be much more serious, resulting in a change in your life that cannot be reversed.

When that happens what will you do? Will that glass start to look more empty than full? Will you become withdrawn because of your physical limitations or the loss of important relationships? Will you lash out at the world for the unfairness of it all?

Or, will you have the ability to shrink your glass? Will you look at the limitations and be able to say, "OK, I can't do what I once did. I can't live how I once could. This is what I can do now. And even though my glass is smaller, my life is still pretty good, and that glass is still at least half full."

I will readily admit my life to this point has been a rather smooth ride. There have been a few problems, but certainly nothing on the scale of what so many of you share in your life stories on these pages. I will also admit I expect my situation to change at some point. My life is not a fairy tale; it will have some chapters that I would rather not experience but must.

Then my half glass take on life with be tested. I believe my faith will provide me with the support I need to handle what is coming at some point. But, how I will react is still an unknown. When those situations arise I hope I can remember the lesson of the smaller glass.

More than any other part of retirement, be it financial, health, relationships, passions.....whatever....I firmly believe attitude spells the difference between a disappointing or unhappy retirement and one that is satisfying. Why? Because my attitude is 100% within my control. The world can throw everything against me to try and break my spirit. But, it cannot determine how I decide to react.

That is up to me. And, my glass will remain at least half full, regardless of how small a glass life decides to give me.


November 7, 2014

Time To Think About the "W" Word

The following is a guest post from Arar Han and deals with an important topic at this time of year: preparing your home for winter. In addition to the comfort and financial benefits, the author reminds us that personal safety is one of the goals.  I encourage you to consider which of these steps are ones you should take.

Many of us have enjoyed the long summer, but now winter is coming. Preparing your home for the coming season is no easy task, so the time to start is now. This Winterizing Checklist will help you keep winter at bay. With these tips, you will lower energy usage, reduce the risk of home damage, and prevent dangerous slips and falls.

Staying Cozy
  1. Buy some cozy blankets and house shoes. Don't wear socks around the house - they can be slippery and cause a fall.
  2. Test your smoke alarms and carbon monoxide detectors and replace their batteries.
  3. Replace your furnace's air filter. This will increase its effectiveness and improve the air quality in your house. Moreover, this can prevent fires while reducing the energy bills.
  4. Turn the furnace on and let it run for a while before you need it. You may need a technician to come relight your pilot light if it went out during the summer. When you first start it up after a long hiatus, it is normal to smell a strong odor. This should be short-lasting. If the smell persists, shut down the furnace and call a professional.
  5. Inspect and clean your fireplace and chimney. It is important to do routine maintenance before you sit down to enjoy your crackling fire. Dangerous chemicals can build up in the chimney and flow back into the home. Stay safe by keeping the airways clean, and make sure to open the flue before starting a fire.
  6. Check the weather stripping around windows and doors and reapply caulk inside and out where necessary. Seal the outside of your home to keep the winter out and your senior cozy inside. Keep the weather outside, where it belongs!
Preventing Falls
  1. Check on your outdoor pipes, hoses, and faucets for leaks. Leaky faucets can create ice slicks all around.
  2. Turn off exterior faucets and drain water from outdoor pipes and sprinklers. You'll want to do this before the first frost arrives to guard your home from pipe bursts.
  3. Stock up on ice melt and sand for when the ground becomes slick with ice. You can sprinkle it before you as you walk, particularly when you first go outside.
  4. Apply non-slip sprays or scuff the surface to create better traction. These sprays create a hard, durable surface that creates texture so that the ground itself prevents slips.
  5. Hire someone to keep the sidewalks shoveled and de-iced. Don't wait until the winter is in full force. Prepayment sometime means that your senior will be first to get plowed when the time comes.
  6. Make sure all areas that could be slippery have well-secured handrails. You want to prevent falls before they happen, particularly on the stairs and walkways outside of your home.
Keeping Nature at Bay
  1. Cover and secure all vents and openings to prevent insects, birds, and rodents from coming in to nest.
  2. Trim overgrown branches back from the house and electrical wires. They can become heavy with ice and snow and cause damage to the home.
  3. Take care of the gutters. Clean the debris and make sure they are not loose or sagging. Ice and snow can pull gutters off the house if they are not secure. After removing the debris, rinse the gutters with a hose.
  4. Check for leaks and misaligned pipes - you want the water to funnel away from the house's foundation to prevent flooding.
Preparing For Anything
  1. Equip your car with an emergency kit. The kit should include a snow shovel, blankets, a flashlight, water, and first-aid kit.
  2. Create a power-outage survival kit. Power outages are common during the winter months, so you can never be too prepared. Include a portable battery-operated radio, blankets, a flashlight, candles and safety matches. Also include canned food with a can opener, plenty of water, and extra batteries.
  3. Make use of weather apps. Know what's coming before hand and stay well informed before winter storms come.
  4. Keep in touch with your neighbors so that you can check on each other. They are your closest resource when you need help.
  5. Keep in touch with your loved ones on a regular scheduled basis. They will love hearing from you, and you can all check in with each other to ensure everyone stays safe.
Winterizing your home now will make the transition into the colder seasons easier. Prevent problems before they happen so you can enjoy the changing seasons with no worries.

Arar Han is co-CEO of Alert-One, a personal safety technology and consulting firm headquartered in Williamsport, Pennsylvania, with offices nationwide. An NAHB Certified Aging in Place Specialist, Arar holds a dual degree from Boston College, and a Stanford MBA. Originally from Seoul, she currently lives in Palo Alto with her family.

Satisfying Retirement received no compensation for this article.

November 3, 2014

What Happened The Year You Were Born?

Hard as it is for me to believe, I was born three score and five years ago- not quite like the Gettysburg Address but close. With constant change the only constant today, I thought it might be fun to look back 65 years ago. I wanted to see what things were like in May of 1949 and how different things are today.

The obvious technological advances are common to us all. My family didn't have a television until I was six, and that was a small black and white screen with all of three channels (with Howdy Doody being the most important).

Telephones were either a rotary dial  in the bedroom or a wall phone in the kitchen. There were both morning and afternoon newspapers and my parents got both.

During my early childhood the I remember we received milk deliveries a few times a week. Families were lucky to have one car; the first one I remember was a greyish 1949 Ford.
Supermarkets didn't exist nor did shopping centers or even strip malls. Small retail establishments lined the main street or were on the nearest corner. No one shopped on Sunday since nothing was open. Mom went shopping a few times a week because the refrigerator was small and food preservatives were pretty much unknown.

The #1 song on the radio in May of that year was Cruising Down The River by The Blue Barron Orchestra 

The Top Movie Stars included:

*Bob Hope
*Bing Crosby
*Abbot & Costello
*John Wayne
*Gary Cooper
*Cary Grant
*Betty Grable
*Ester Williams
*Humphrey Bogart
*Clark Gable

How about costs for things we bought?

A new house was $7,500
The average yearly salary was just under $3,000
The average minimum wage was 70 cents an hour
Milk was 84 cents a gallon though most folks bought the half gallon size

Bread (white only for most of us) was 14 cents a loaf
Gas cost 26 cents a gallon and the new car to put it in was $1,420.

And, in world events:

The Berlin Airlift ended in May, 1949.
Russia set off its first atomic bomb
Communist China was established
6,000 were killed in an earthquake in Ecuador
RCA built the first color television

NATO founded
The first VW Beetle sold in U.S. (my first car 18 years later)

What I found both interesting and important to remember were the rather momentous events happening on the world stage. We tend to think of today as a period of tremendous upheaval and uncertainty. But, 1949 saw a major  disaster, the atomic bomb "club" expanding to include Russia, and the establishment of a communist government in the most populous country on earth.

Maybe we can feel a little better about the state of affairs today when we look back and realize there have always been events and actions that can shake our world. 

You might find it fun (and educational) to do some quick and easy Internet research on the year you joined the human race.