2 days to inauguration & Money Monday

So far the demonstrations at different state capitals have been peaceful as far as I know. Hoping it stays that way!

___________________________________________________________________

On the money in retirement front:

This is my first year having to take a required minimum distribution. I logged in and went through the steps to set up the payment for late this year only to find out you can only put in a date that is 180 days or less away. Why not put that info at the front end lol. Noted to come back and do it in June. 

We are thinking of putting it right back into our Roth accounts as they are earning more than any other investment we have. Has anyone else made Roth contributions after retirement?

16 days to Inauguration

 I just started reading “The Splendid and The Vile” about Churchill and the Blitz. It opens with this quote which is so appropriate for last year and this - probably for all the time but especially now.

“It is not given to human beings - happily for them, for otherwise life would be intolerable - to foresee or to predict to any large extent the unfolding course of events.” 

- Winston Churchill, eulogy for Neville Chamberlain, November 12, 1940

Be adaptable, find solutions, help each other and don’t forget to be thankful and find joy in being alive.

I’m thinking of doing occasional Money Monday posts so thought I’d give it a try today. 

I mentioned that our year end financial review pointed out that we will need to reinvest most of the money we have in CDs at some time this year. No surprise here but our year end review showed an increase in the grocery category (food, toiletries, household supplies, alcohol) and decreases in eating out, entertainment, travel, haircuts, gasoline. I expect this year will be essentially the same although we are increasing our donations and contributions to granddaughter’s college fund. 

In addition, since our taxes are simple we are thinking of going back to doing them ourselves. The tax preparer charged $350 last year so anything less is a savings. Any easy to use tax software to recommend?

18 days to inauguration

And what could still go wrong? Let’s hope it isn’t significant.

I got my financial review pretty much done yesterday and one thing I was reminded of is that almost all of our CDs will have to be renewed this year. Wishing interest rates were better but that is a small thing in the midst of this pandemic. We will make short term decisions again and be quite grateful to have this challenge.

I’ve decided that in addition to my 2021 areas of focus and monthly goals plus key to do list I need a word or phrase of the year. It has to be some variation of focus on what I can control or influence. Steady small steps in the right direction seems to be my focus for the year right now. Not exactly inspiring but perhaps right for this time.

Do you have a word or phrase of the year?

Managing Your Cash Flow: A critical part of living on retirement income

My older son keeps asking me what advice I have for dealing with elderly parents and for retirement in general.

One thing that popped into my mind after our last conversation was that most retirees really need to get clear on when those non-monthly expenses will hit and how they will manage their cash flow to manage those. Then there are the expected but unplanned expenses like car or home repairs and other one time bills.

What approach do you use to manage your cash flow? Transferring money in and out of a savings account? Sinking funds? Cash envelopes? Credit card debt or installment payments? Live on last month's income so you are always a month ahead with cash flow? I'm sure there are other approaches that aren't coming to my mind right now.

Now that we are in our 3rd year of living on retirement income and savings with the ongoing expenses of our new home, I am really seeing our own financial pattern. First quarter of each year has predictable large annual and quarterly expenses. Then there are some other months that  have extra expanses that are unpredictable like car repairs. Plus the one time expenses we choose such as home improvements or travel.

We are extremely fortunate to have the end each so far with additional money to put our savings, but there are many months we would be in the red if we didn't have savings to transfer into our checking account. I've set up a table by month to show when irregular expenses are due so I can plan the next month's cash flow once I know the actual amount of each as they do change each year.

Something for those not yet retired or changing their living situation to consider.

Worst retirement financial decisions you have made?

This is a hard one for me as I don't think we have made many yet. However the best decision we made from a family care taking perspective will probably be a poor financial decision.

The thing is we are going to end up moving twice while living independently. We moved to our current location because it is near my FIL's assisted living facility and today that is proving again that it is a good care taking decision ad Hubby was able to pop over to be with his Dad when he was taken to ER this morning. In fact he was just admitted with treatable problems.

However when he is no longer alive the plan is to move near our granddaughter (oh and her parents!). Our local son and DIL want to move there too so we will all live in the same area and be able to help each other and enjoy being on site grandparents, uncle and aunt.

That means we will be selling and buying a home again with all the associated costs as well as moving expenses. And in just the year we have been here, housing prices in the east bay area of California have skyrocketed.

So that is our biggie! How about you?

Best retirement financial decisions you have made?

I have been taking stock of what we have done right and what I would have done differently during our first six months of both of us being retired. Let's talk about the financial front for now.

As you know we sold and bought houses as part of moving across the country to be near family. We rather reluctantly decided to live where we are currently because it is near my FIL's assisted living facility. That has turned out to be a good decision not only because being near him is a good thing but also for the financial impact. For one thing, it has certainly reduced our travel costs as most of our travel in the past was to visit family. Unfortunately it has also made us less likely to do other travel as we have yet to find a way to leave our special needs dog while doing so.

The main thing about moving in financial terms though was that we were able to buy a property that suits us at this stage for a little less than we received from selling our Atlanta house. Our monthly home related bills are lower too even with the HOA fee. As a bonus, after living here a year we do like it and are quite comfortable.

Secondly we decided to try to live with one car instead of two. That decisions was prompted by the need to only drive two vehicles across the country - the rental U-Haul and one car. So we sold the oldest, highest mileage car and kept the newer, albeit smaller one. We figured we could always buy a new one if we truly needed it and thought we would probably get a hybrid do to the increased driving that we would be doing as we travel longer distances to spend time with family.

The good news is we haven't yet needed that second car. So our gasoline bill has gone up as we drive more overall, but our car insurance, licensing and maintenance costs are lower. So far we haven't even used Lyft or Uber although those are options. We have each used the free to us city operated shuttle bus, taken the metro to the airport, or accepted rides from new friends (especially when DH is going to play pickle ball with those friends). So far so good on this front.

We both went on Medicare after the move and had to decide what to use as supplemental medical insurance. So far we have managed to keep our insurance costs about the same (which was a priority) while improving our coverage in the sense that our co-pays are almost non-existent except for prescriptions and dental. I do know that this outcome is at the whim of the market, but so far so good.

The biggest decision we have had to make so far has to do with when to take Social Security or to start withdrawals from retirement funds vs living on DH's pension and our cash savings. This is a work in progress. We decided to take DH's federal pension with survivor benefits which did lower the monthly amount but gave me peace of mind for my future financial security. Since I am older and have a slightly lower SS payment I started collecting at the same time I started paying for Medicare. Right now the plan is to hold off on DH collecting SS until he is 70 - again to maximize my future financial security (as well as his if he lives longer). We are hoping to wait until mandatory withdrawal age on our other retirement accounts but will start withdrawing sooner if we need to.

So how do I know all of this is working out?

The best decision of all is that I have tracked our income and expenses for years so I know exactly what we need to have to spend and what our cash flow will be. We continue to practice being frugal where we don't care how much we spend so we can spend on what we really want to and care about. Also we revisit our decisions about every 6 months to make sure we are on track .

How about you? What have been your best retirement financial decisions so far? We'll talk about the worst ones later LOL.

Banking Wednesday: Retirement Finances

I have decided to deal with most financial items on one day of the week and Wednesday it is. So here are my Retirement Financials for the week.

1. The local newspaper raised their rate $9 a month without notice to just over $35/mo for a skinny little throwaway with lots of ads. We decided to cancel.

2. We made a decision regarding how and how much to contribute to our granddaughter's 529 fund and mailed the first check. Hope I'm still around when she starts college or whatever she decides to do after high school. 17 years to go LOL.

3. I thought we had to pay our excess liability insurance annual bill this month, but I looked it up and our move changed the renewal date to May. So I decided to look up all the rest of our insurance new renewal dates too so I can be sure we get and pay the bills online. In addition to auto insurance and excess liability we have standard homeowner's and earthquake insurance policies. We stopped our life insurance as we started collecting retirement benefits as we no longer need to replace income but instead made sure all of our beneficiary documents were up to date on pension and retirement accounts.

4. I started figuring out what documents I have or need to send to the tax accountant. Most won't be available until the end of January, but at least I have found what I do have and made a list of the others.

5. We both registered on line for our health insurance Medicare premium refund program ($600 each) and mailed in the documentation required. I also completed the online health questionnaire and got $50 on a debit card to use for prescriptions.

6. The personal loan repayment check we received reached our credit union in Georgia and apparently cleared - yeah!

7. An online item I returned was received and processed for a refund.

Keep the long term goal as well as your present comfort and life enjoyment in mind!

As regular readers know, we are steadily working our way through the "punch list" created by our new to us home inspection. We also have added some things after living here for 4 months.

Today though it hit me that in terms of resource allocation we could save $425 by not installing a gutter for the patio area given how infrequently it rains here and how many pine needles would have to be regularly cleaned out of that gutter. Cancelled that quickly.

The money will be better spent towards a whole house water filtering system as the water here is very, very hard and leaves deposits in and on everything. That is next up on our list.

On the other hand, although I have been quite comfortable sleeping on our new mattress, Hubby has not. We spent a good chunk of money yesterday on a cotton wool mattress topper and he slept much better. I think the bed is slightly less comfortable but I can live with it.

We also bought 4 tickets to a comedy show to attend when our local son and DIL spend the weekend soon.

So there you have it. Long term goal is make our money last if we live to 100+. Current comfort and  is sleeping well and not battling hard water deposits (not to mention not having to replace appliances often due to said water). Life enjoyment is fun time with loved ones laughing hopefully.