Wills

The $5,000 work benefit we didn’t pass up and a public service announcement.

agreement balance blur business
Photo by Pixabay

Updating our Wills has been on our agenda for several years.  We procrastinated in updating mainly because the attorney that did our previous Wills had left the area.

However, after handling an ugly estate issue for my parents for a cousin who didn’t have a Will but a sizeable estate, (relatives you never heard of or have known will come out of no where when that happens) it became apparent to us that this was no longer a ‘should do’, but a ‘must do’ to complete ours.

Recently my husband discovered an employee benefit at his firm –  $5,000 towards preparing Wills.  Yes, please.

We knew our estate didn’t warrant all of the $5,000 benefit, so we figured that we could get these done for free.  And that’s exactly what we did.  After we completed them, we spoke to each of our children about the Wills, gave each a copy and feel confident that they will be carried out to our wishes.  We will revisit again in 10 years if something unforeseen happens.

If you are lingering with trying to decide to have a Will or not, may I strongly suggest you do so?  If you don’t sign a Will, your money and valuables will go to the next BLOOD relative in line.  No choice there.  It’s the law.   I’m sure you wouldn’t want a judge deciding who is going to take care of your kiddos either.

If you don’t want to hire an attorney or have the funds for one, there are plenty of online sources that can walk you through the process.  One of the best online Will Makers is Quicken Wills & Estates.  [NOT SPONSORED] For less than $100, you can do a very simple Will.  We were all set to do this until we found out about our benefit.

Don’t wait.  Do it today.

Do you have a Will?

 

 

 

Budgeting, Retirement, Retirement Journey

Series: Retirement Preparation. The retirement budget.

grey metal case of hundred dollar bills
Photo by Pixabay

Expenses.  This is probably one of the most important of all the areas of preparedness for retirement.  Without knowing how much you will need in retirement makes saving goals for retirement a guessing game.

I have been preparing my budget now, and will be living off of our potential retirement income over the next four years, while saving the overflow in a cash liquid account.

Of course, we don’t know exactly what will happen in retirement, but we do know we will need a good amount for health care.  I am not going to nickel and dime this category  because quite frankly without health, nothing else matters.

Another line item I want to have is a significant amount in travel.  For the first 10 years of retirement, we plan on taking full advantage of our current health (good!) to blow through our travel bucket list.  (a topic for a future post!)

white cruise ship
Photo by Matthew Barra

That leaves us with the every day expenses — mortgage, utilities, cell phone, car expenses (insurance, gas, maintenance) food, eating out, gas, gifts, clothes, subscriptions, giving, personal care, blow $, household, taxes and insurance.

Mortgage.  Ultimately, we don’t want a mortgage.  Unfortunately, four years doesn’t give us enough time to pay off our current home.  Our plan is to sell our current home and downsize to a smaller home in our area.  Our children and grandchildren are here, so moving to another area doesn’t appeal to us.  However, downsizing into half the space, half the utility bills and half the taxes and insurance does. 😉 We hope to downsize in the next three years before we retire.  Potential Savings:  $30,000/year.

Cars.  We will be going down to one car.  In Virginia, there is a personal property tax on cars each year.  If you have a fairly new car (which we do), it can be as high $1,000 or more.  Going down to one car would be a HUGE savings to several line items, including car maintenance, gas, taxes and insurance.  My husband never uses his car on the weekend, and I barely use my car during the week.  When he is retired, we don’t see needing both.  Potential Savings:  $3,500.00/year.

By rejiggering just those two categories alone, we would save over $30,000 in yearly expenses.

All other expenses.

We are in a good place with other line item expenses, so I’m keeping them all the same for retirement.  By saving on the big ticket items (mortgage and cars), the other line items can remain the same.

So, where does that leave us?

Here is our preliminary REALISTIC retirement monthly budget, and one we follow now except the $2,500 is our mortgage instead of healthcare, and our taxes and insurance is $1200/mo.

  • HealthCare:   $2,500.00** (This includes insurance, co pays, medications, and concierge service for my endocrinologist )
  • Travel: $1,500.00 (5 trips a year)
  • Taxes & Insurance: $550.00
  • Utilities: $275.00
  • Cell/Cable: $200.00
  • Groceries: $500.00
  • Household: $100.00
  • Subscriptions: $25.00
  • Eating Out: $100.00
  • Home/Car Maintenance: $250.00
  • Gifts: $200.00
  • Clothing: $150.00
  • Personal Care (makeup/hair): $100
  • Blow $:  $200.00

Total:  $6,650.00

**Healthcare will go down significantly when Medicare kicks in, although I anticipate spending some money for gap insurance.

Well there you have it.  After months of agonizing over our expenses, I can honestly say the above numbers are as accurate as they can be.  I’m not going to lie, that is a high monthly nut to cover.  $400,000 for the first 5 years to be exact, then $135,000 for the next 2 years (when medicare kicks in).  However, once we start social security at age 67 (yes, we changed our minds again 😉 ) our monthly draw from personal savings will be $2,625/month or $31,500/year.

Will we have enough to retire at age 60 given the above numbers? I think so.  But stay tuned for the next post in our series, OUR CURRENT SAVINGS.

If you are retired or planning to retire, how do your expenses align with mine?  Please share!

 

 

 

 

 

 

Retirement, Retirement Journey, Social Security

The 4 Years before Retirement

lose up photo of green flower
Photo by Vraj Shah

Spoiler Alert. We now have a date.  My husband is officially retiring in 4 years and we are busy gearing up for the day when he will no longer be getting a paycheck.  My husband’s retirement age will be 60!

I guess that doesn’t qualify us for the F.I.R.E. (Financial Independence, Retire Early) movement, but it sure beats waiting until 70 or beyond to retire.

I have been reading a lot of articles on pre-retirement planning.  While I may not have anything extra to add, I thought it would be advantageous to share how we will be preparing for our retirement.  I will document our personal journey in this space as a way to keep me accountable.

For us, we have concluded that there are five things we need to consider before we retire.  In general terms, they are:

  1. Our Health – what will our anticipated well-being be when we retire – and what we will do in the next five years to make that the best it can be;
  2. Our Wealth – what we will have potentially saved in our retirement accounts, how we will navigate withdrawals and when we will be the most advantageous time to take our social security benefit;
  3. Our Expenses – what our retirement expenses will look like including medical expenses;
  4. Our home – where we will live out our retirement years and if we will move, downsize or stay put; and
  5. Our Hobbies & Interests – what we will do with all that free time.

In future posts, I will be sharing how we will be preparing and addressing each of the above five considerations.   I hope you’ll join me.

If you are thinking about retiring, how are you preparing?  If you are already retired, am I missing something?

 

Goal Setting, Retirement, saving money

An update.

I was supposed to be off my blog for a month, not three.   I must admit I didn’t go cold turkey on social media.  I did read some blogs, watch some videos and follow some friends on Instagram during that time.  Although this blog remained silent, I’ve been busy moving forward with completing our Wills, updating our retirement accounts, bagging the concept of long term care insurance (blog post to follow), planning a few trips and generally enjoying the last of summer and beginning of Fall.

I do have a lot to share, especially with regard to some previous post ideas.  Needless to say, my opinion has taken a 180 on several concepts, which I will also share soon.

So, if you are still out there, I will be updating.  I look forward to talking with you all soon!

Time off

A Cyber Hiatus.

landscape photography of white mountain
Photo by Julius Silver

If not observed, you could waste your whole life away in front of a screen, no matter what the device.  You could miss the people you value the most, who are right in front of you.  I realized that I was spending far too much time in front of the screen.  So, for 31 days there will be no more blogs, vlogs, or Instagrams.  I’m taking a cyber hiatus.

I will be back August 1st to tell you how it went.

Have a great July!

Budgeting, saving money

Dumping Amazon Prime, and saving lots of money in the process.

woman holding card while operating silver laptop
Photo by Bruce Mars

It’s taken me a couple of years to actually pull the plug, but I’m finally doing it.

5 Reasons I’m dumping Amazon Prime

  1. HIGHER PRICES.  Amazon is no longer the least expensive retailer online for all products.  Recently I started checking other company websites and was shocked at how much less expensive things are outside of Amazon.  When I was looking for a specific item for my son for his birthday, I checked Amazon.  The item was $300, which was a bit more than I wanted to spend.  I researched the item and found it on another website, Academy Sports for $199.  It also came with a 20% coupon code.  Add with the 6% I received on Ebates, PLUS free shipping, I ended up saving over 60%.
  2. TARGET (and other online stores).  Other companies are starting to compete with Amazon, and I’m taking notice.  Specifically Target Online.  Recently I wanted to purchase some books.  Habitually, I searched Amazon first.  (That’s where you buy books, right?)  But then I decided to check Target.  Target not only had the books at the same price, but because I had the RedCard (no membership fee), I received 5% off and free shipping.  I also earned 1% in Ebates, so total savings was 6%. A WIN for me. 🙂  (Target RedCard comes in the form of a debit card if you’ve sworn off credit cards, FYI.    Not sponsored, I just like the savings.)
  3. HIGH MEMBERSHIP FEE. When I first signed up for Amazon Prime, the membership fee seemed minimal. I would make that up in the first couple of shipments.  Now the fee is $12.99/mos. or $155.88.  If I chose to pay for it all at once (which I have) it’s $119.00.  I understand that Amazon Prime isn’t just for free shipping.  They offer movies, books and ‘special offers’.  Honestly, I’ve rarely taken advantage of it.
  4. SUBPAR DELIVERY SERVICE. Delivery from Amazon is subpar, at best.  (UPS is a close 2nd in deplorable delivery practices.)  Packages were being thrown on our porch (we have the RING Security System and see everything!).  Also, we do not have a covered porch, so packages were getting soaked in the rain.  And, on several occasions, packages went ‘missing’ and we had to contact customer service.
  5. DEPLORABLE CUSTOMER SERVICE.  In the past, I’ve had decent service.  However, my last two dealings with Amazon ‘customer service’ have left me scratching my head.  Let me just preface this by saying I’m very careful about ordering products that I may have to return.  i.e. clothing.  I choose Amazon Prime, Free Returns every.single.time.  And, as I had anticipated, I had to return clothing items that did not fit.  After taking 15 minutes to find Amazon’s customer service number (1(888)280-4331 – you’re welcome. 😉 ), I had to argue with the rep because they said it was from an outside vendor and there would be a charge to return it.  It was very clear on website that it was free returns.  In the end I had to contact the specific vendor personally, and ended up losing 50% of the cost of my purchase. 😦

To be clear, I will still use Amazon from time to time.   I just won’t be paying the membership fee to do so.  I have a feeling that I’ll be saving much more than the membership fee.  It’s time to allow other companies compete for my business.   Sorry Jeff Bezos.  But I’m sure you’ll get over it.

How often do you check prices online?  Do you automatically go to Amazon?

Retirement, Retirement Journey, Social Security

62 or 67? The $188,000.00 Question.

Social Security Age-1.png

$188,000.00 is the amount of money that we would leave on the proverbial table if we waited until our retirement age of 67 to take Social Security.  By quickly calculating the difference in the amount we would receive, it would take 12 years for us to break even.

Waiting until 67 allows the benefit to ‘grow’ 8% each year, which financial advisors will tell you is a great rate.  (But you all know how I feel about financial advisors However, the 8%  incentive is only good if you live well beyond 74.  The operative word being ‘live’.  All of the social security benefit goes away when you die.  Since we don’t know when we are going to die, it remains the one thing that makes this decision a gamble either way.

I will have to make a similar decision on a pension that I expect to receive in five years.  Based on the numbers at this time, I can either take $600 a month for life, or a lump sum of $137,000.  If I live another 30 years, the monthly payment would be $216,000.00 in total pay outs but would end upon my death, whenever that may be.   However, if I take the lump sum, invest it conservatively (earning 4-5%) while taking $600 a month, after 30 years I would still have $64,000.00.  It can continue to grow and be given to my heirs even after I’m gone.

Screenshot_2019-06-14 How long will my money last with systematic withdrawals Calculators by CalcXML

 

This seems very similar to the decision with Social Security.

If we never spent the monthly checks from social security from 62-67, the $188,000 could be invested (conservatively at 4-5%) until 67.  At 67, we would have

$216,000.00

Now let’s say I started taking the extra $1,200 a month I would have gotten if I waited until 67, from that investment still earning 4-5% a year.  I would be able to pull that money out for another 25 years.  If I die before the 25 years is up, that money can go to my heirs as well.

Screenshot_2019-06-14 How long will my money last with systematic withdrawals Calculators by CalcXML(1)

I’ve accounted for taxes and low investment yields.  It seems like a no brainer to me.  I should take the money the earliest it is offered.

Okay all you math nerds…am I missing something?