Yes, I’ve just had my first Government Money. Now if I can just get me one o’ them O-Bama Fones…. /sarc;
It is a rather giddy thing. Look at the bank account one day, $16.23 in it. Look the next, a couple of $Thousand shows up. Enough to cover the house payment (set about 28 years ago…), the car costs, and food. That’s after the Government Medical (Medicare A&B) are auto paid.
Strange feeling, really. I know I paid into Social Security (A LOT) over a lot of years and it is an “entitlement”; but now I’m part of the problem instead of part of the solution. Oh Well. “Going Galt” has it’s upside ;-)
Still shy about $500 / month from what the spouse wants to spend and some more for “toys & travel” I want to do. But enough for “sit tight”. Plan is to prep & sell the house, buy more house, for a lot less money in Florida, free and clear in cheap seats, and have a bundle of spending cash left over. Maybe. We’ll see, since there’s a chunk of “logistics & repairs” to fund between one end and the other. One alternative is to clear out the 401k and pay off the last of the mortgage 2 years early. Then we’ve got plenty in the monthly Government Money. But no mortgage deduction…
Ah well, not for today to tune that up.
For today, I’m having a celebratory bottle of Italian Wine. “Grifone Bianco” made with organic grapes from Italy.
Got it at Trader Joe’s for something like $4 / bottle. Why? Well, I’m trying to get various “crap” out of my input stream, and the only way to do that is “Organic” here. You can’t select non-GMO as an option as labeling for GMOs isn’t required. So that means your wheat is likely “dried off” with a big fat glyphosate drench to make choosing when to harvest easier. Similarly corn is likely to be expressing Bt toxin on every cell surface (a known allergen and I’m prone to allergies – which may explain my poor handling of corn the last couple of decades). The list goes on.
For wine in particular, much of it has a huge load of Sulpher Dioxide in it. This prevents spoilage. It also makes the wine taste very sour unless you let it breath a long time ( I discovered if you do about 20 seconds on frappe in the blender it drives it out). It also makes some folks wheezy. I’m not in the wheezy class most of the time but have started to de-sulphite my wines anyway. This one says nothing about sulphites on the label. It also doesn’t have that ‘vague odor of sulphites’ about it.
I’ve not bought it before, but find it a very nice Italian Style table wine. A little more “grape flavor” than many others, not a lot of acid. Not a really “crisp” white (low sugar / high acid) more a mellow drinkable dinner wine (low acid, bit of residual sweetness, the “live” feeling along the edges of the tongue.) Fragrance is nice, bit of fruit, but not strong (then again, my nose is a bit stuffy at the moment from a pooch who insisted on quality lap time… We love each other, but I laugh when the pooch starts sneezing too ;-)
Nobody is going to jump up and shout “Oh My God! He has Bianco!”, but I’d rather have this with a plate of fettuccine Alfredo than some over the top biting Chardonnay. It will be on my “regular buy” list from here on out. Just not needing to use / rinse the blender makes it worth it ;-) Though I am getting this urge for a plate of cheeses, some pepperoncini, a garlic bread stick, prosciutto, and, well, the full antipasta plate…
So now that I’m a full on Democratic Party Demographic, what to do? After all, according to their rules I’m an Hispanic, and now I’m on the dole.
But I don’t let it go to my head. By the US Government rules, 1/2 the world is Hispanic:
So maybe I ought to go apply for Welfare, too. After all, I don’t quite have enough income to cover all the things I ought to be buying. I’m technically Hispanic, and I’m an old person. That ought to be enough. I suppose if it isn’t I could self-identify as a woman… What are they going to do? Tell me to go get a job? I think I need a sign saying “Bernie & AOC 2020!” ;-)
Sigh. It’s a crazy world. (Or rather, a world of crazy leadership).
So join me in a minor celebration of life, and life as a Government Dependent Unemployed and only marginally employable Old Person who is now “part of the entitlement problem”. I lift my glass as a ‘wave offering’ to the Gods That Be!
“Bottle of wine, Fruit of the vine, When you gonna let me get sober; Leave me alone, Let me go home, Let me go home and start over…” But I am home…
(He checks stock: 2 bottles ought to get me through the day ;-)
And a new chapter begins…
E.M welcome to the club. You’ll get used to it quite quickly. As for the payoff mortgage issue it depends on whether you have enough monthly cash to be comfortable with payments. From you description that answer is no, so pay it off and consider banking/investing the new savings.
As for the mortgage interest issue that goes away in 2 years or its tax impact probably next year because of the tax law changes, because business expenses may not be enough to exceed the standard deduction. (I’m assuming you are still claiming them.) That too will end soon.
As for owning the house free and clear, it adds a level of flexibility few have experienced. Have you considered holding the mortgage for the buyer and investing the monthly payment in your new house? Dunno what the monthly payment differential might be between there and FL, but if large enough could add some income, or just continue with your current plan.
Technically I could have joined the club last November, but I’m not keen on the chop to the payout and my oldest doesn’t start college for another 5 years. So, did you take an early out or wait the full boat? I’m thinking to wait until #1 son starts college, take the S/S, and keep working. That way S/S can pay for (most of) his college.
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I waited for full boat. It didn’t make a lot of difference, but I was doing OK on trading and accumulated cash so…
All up in the air. It would likely rent for about $3k / month (it IS SillyCon Valley…) or sell for a bundle; but in either case I need about $40k of repairs (new roof, fences, carpets, what 30 years of living in it does..) or I could just sell it as a “fixer upper” and take about a $60k lower sales price. But be out a year earlier.
I’m going to ask my Tax Guy for best strategy on the payoff question. Yes “I have a guy”. He got me out of a bogus $200k or so hole with a $1200 ticket price, so yeah, “He’s My Guy!” ;-) ( The IRS had imputed full sales income from a wash sale and a temporary parking investment of an inheritance in some Index Funds. All bogus, of course, but with “Give us $200K NOW OR DIE!!!” letters from the IRS, well, let’s just say adrenaline and denial were involved… so the relatively small (about $80k) money that had already been used to pay off debts somehow being turned into a $200k cudgel has left me less than enamored of the IRS or US Government.)
Once that’s out of the way, then there’s just the “fix first or sell first?” question.
In any case the end game is good. A place bigger than now somewhere in Florida and more money than we are able to spend on toys and travel. Just a LOT of legal hoops to jump through along the way. And which money from what bucket goes where. So better to pay the mortgage payment from the 401k, or pay off the mortgage? Decisions decisions…
I’ve been mulling things over since a year or two ago. The complications are marrying and having kids late in life, and a wife who is 14 years younger. There’s the whole survivor’s benefits thing to consider, and there’s a defined benefit package lurking in the wings to complicate matters with its own rules. I might look for a financial planner, but I’m just not sure how to approach things.
I got my Democrat Dues refund check today too, E.M.
It’s a Big Club and almost everyone over 62-1/2 can be in it. 😜
Sidebar on Medicare: From Mrs. H.R.’s insurance group, I had access to a 3rd party consulting group (no charge!) that would assist in getting me “the right package at the right price for my personal situation.”
I was going a bit crazy trying to figure out all the options. A lot of what I was receiving as “information an instructions” made no sense. I called the consulting group and it took hours for them to help figure it out and get me signed up with the appropriate plans. I thought I had people that were on their second day on the job there, but no, it’s really that screwy. So it took 6-8 hours of phone time while they consulted further with other SMEs to answer my (not stupid*) questions.
I can see now why 1/2 the mail leading up to decision time was from consultants and consulting organizations offering to “help” with the decision… for a fee or even free! as they would get commission of the companies they steered me too. The wife’s organization had access to just about all insurance companies and their options and was being paid a flat rate by my wife’s retirement fund, so they had no particular horse to back. I liked that.
For some Medicare is simple but depending on needs and situation, it can be a nightmare for others. It took a while but I got what I needed, understood what I got, and was well satisfied that I got a good rate with a responsive insurer.
*Not stupid – If what they were saying did not make sense, I would point out the non-sense, and ask a question. Half the time they had to throw the question ‘upstairs’ because they really didn’t understand either but hadn’t questioned the whys like I did. When I was done, I was satisfied that everything was set up as best as possible for me.
BTW, Florida has a “Homestead Law” that lets you “file homestead” on a house and then, if for whatever reason, you can not pay the mortgage or even the taxes, it comes out of the sale / Heirs cut when you die. I.E. you can’t be pitched out on the street.
So when we buy a place, we will file. Then it is “no longer my problem” but a problem for The Estate whenever whatever happens… (likely nothing, but…)
Then, in California, IF I derive any income from California even rental property income and likely income from a carried note as well, I get to file a California Income Tax and pay taxes…
All this argues (strongly…) for a “sell it all and get the hell out of California” strategy…
Basically “Take the money and run”…
(Yes, I’m nearing the bottom of Bottle #1 and becoming musical… Hey, it happens ;-)
That’s why I hung out for the Full Benefit age, a younger spouse and survivors benefits. She will be fine on my full survivors benefits + her part +her 401k + her inherited home & car and zero debt.
My spouse is complicated by the California law that punishes teachers. Any SS benefit is taken out of your teachers retirement… They call it a “double dip”. Yet work and payments were made in both cases. Damn You Governor Ronald Reagan!!! (Hey, I think I’m getting the hang of the Democrat thing!)
If there’s anything I can help with, let me know. For us, having me hang out to Full Benefits and then not die soon was the best formula. I’m really happy with the “not die soon” part! ;-)
For me, for now, it’s actually pretty simple. Kaiser Senior Advantage. It is cheap, covers about everything, and I’m already a Kaiser guy. The fact that they do really really well on big stuff and OK maybe on small stuff is fine with me as I go to the doctor about once every 3 years… I’m “abominably healthy”… So not much decision needed.
What will be an issue is the Florida Move. Nearest Kaiser is Atlanta. “Some ponder required”. But that’s at least a year away. Maybe. ;-)
@E.M – Yeah, it was the travel thing that was making things complicated for me.
All of the policies being shoved at me were not clear on that point. That’s where the consultants came up with 2-3 policies for me to choose from and the best I found would pay up their supplemental share to any doctor who accepted Medicare patients. The consultants weren’t often concerned with that specific detail in the policies and that threw them quite a bit. I did not want HMO coverage nor a Health Network that had “almost” nationwide members, but a problem for you if you were in a city that had no Dr.s “in network.”
My long-time practice I see at home takes all previous patients when they go to Medicare, so that was a snap.
In Florida, it’s not a problem to get a Dr. who accepts patients with Medicare + Medi-gap insurance. There are some Dr.s who won’t take Medicare patients even if they have supplemental insurance because of the hassle of dealing with the gummint. But I’d suspect any town in America we’d be in would have a Dr. or two that would see me.
Anyhow, I have gold-plated, top-of-the-line health and prescription insurance with minimal co-pays and a lot of stuff with no co-pay. There is a once per year deductible of $168 dollars and no further deductibles after that. And it costs $1,000/month less (you read that right!) than my old insurance premium. (That extra $1,000 per month comes in handy, I tell ya. 😁)
@EMSmith; welcome to the Giverment Welfare system of entitlements…pg
Well I feel no shame for drawing my SS benefits, 3 of my 4 grandparents paid into SS and never drew a penny, my other grandparent died at 65 so only drew a couple years in the 1960’s. My mother, father and older brother also all died before drawing a penny of old age benefits. I am the only member of my immediate family who will likely draw any significant amount from the fund. It is a ponzi scheme and we all paid in, and I am happy to recover some of the funds my family has put into it.
That said, many people misinterpret the term “entitlement”, as it being some sort of unearned gift, that is not how the government uses that term, it simply says by law if you fit the criteria you are “entitled” to draw your payments as long as you live and the government is obligated to pay out those benefits outside the budgeted funds, directly from the treasury. In short SS like some other programs gets first dibs on federal money, and the left overs go to the budget process.
Estimates are, that it will run into a negative cash flow in about 2035 when funds paid in will not equal obligated funds going out. When that happens, they (if no other fix happens) will be required to down grade the payout to about 70% or so of current payments to match the revenue stream.
For American males in my age cohort the life expectancy tables say I will likely only draw benefits for about 15 years. If I beat the age life expectancy lottery and live into my early 90’s I still will only draw about 20 years of benefits. As a result I started drawing before I reached full retirement age. The money gained up front by drawing early is unlikely to be canceled out by living long enough to see the cut back in pay outs.
Not to mention I plan on working for quite a few more years, so salary + slightly reduced SS payments gives me some enhanced income while you can still make use of it.
If you are still working and draw your SS early, you can in effect pipe those funds directly into your 401K fund by taking a larger share to the fund than you could afford without the SS.
Of course each persons calculus of all those factors is a bit different and you have to sit down and work out most likely outcomes and which path gives the best outcome in the most cases.
Yes, every situation is different.
I took starting last year at 62. With steady investing I have a fall behind point at about 78.
Yet, I am collecting it now! ” bird in the hand” and all that. And I think there will be means testing in the future.
…little hotel, cold as a well, and dark as the coal in a mine….
Blanket’s so thin, that I lay there and grin, huggin’ my bottle of wine…
Yes the “Bird in the hand” aspect played a large part in my decision as we have seen with Obama care and changes to other federal programs there are no contractual guarantees that what you will have in the future is similar or better than what you have now, so I decided to deal with a known use case than to hope (not a plan) that things would be as I expected years down the road when there is no do over possible.
Sure if I had >500K in a 401k or something like, that I could afford to take that gamble for a higher future payout, but I do not and thought hedging my bets with the facts at hand the best option.
Luckily right now unlike some of my age group I am healthy enough to still be able to work at a good paying job, so going to take advantage of that while I can.
I haven’t made the leap yet. I reckon I’m eligible.
I prefer to stay away from doctors and meds to the greatest extent possible. I have wondered if, when a person signs up for Medicare, do they hound you to do stuff? I don’t want to be hounded. I don’t trust their judgment.
@EM I’m about an hour northeast of you. We plan to sell in a year so I have been keeping an eye on the neighborhood sales. I found that pretty kitchens sell the houses around here with multiple offers way over asking. Without that they sit on the market for much longer so the price sags. I think the reason is that the young buyers are able to finance the purchase over 30 years vs paying out of pocket to fix it up. . I am also sub-dividing a ridiculously long family room to add an office/legal 4th bedroom. It hurts to spend money on a house I’m leaving, but I think I can get back double what I am putting in
Next fall is the garden’s turn to get tided up. The chickens did a number on the greenery out there.
I hope it pays off like I think it will. This is our last chance to cash out of California and wave goodbye. I’ve loved it here but it is getting too crowded, expensive, and crazy.
when a person signs up for Medicare, do they hound you to do stuff?
When you register for SS they will automatically sign you up for medicare. I took no action to activate medicare, but got a card in the mail shortly after I set up for SS.
You get on mailing lists, so will get enough junk mail on medicare advantage plans to feed your fire place for a while. I am still under a work insurance program which will pay first before going to medicare so I am pretty much ignoring all that.
You can (or I could…) sign up for Medicare earlier than you get Social Security. It comes in several parts, and IF you do not sign up for “Part B” (that costs about $138/mo?) “on time” you will get increasing prices when you do sign up (i.e. a penalty for staying out of the pool).
You can avoid this penalty by showing you had coverage from employment insurance (COBRA coverage does NOT qualify…) the whole time.
I’ve gotten ZERO junk mail out of it (other than Kaiser poking me to sign up for their Senior Advantage as they know my birthdate… and I’ve been on their insurance). As Larry noted, it’s the commercial side that sends you stuff.
I did the online sign up and it was painless and about 10 minutes (as they claimed):
So IF you are over 65, you are strongly encouraged to sign up and get the Part B thing taken care of.
You can get the Medicare thing done, but skip the SS if you like:
So don’t put off the Plan B thing if at all possible. A surprise loss of spousal work coverage can toss you into a big penalty…
So far, the impact it has had on me is that I got a nice card in the mail to put in my wallet and my SS payout is reduced by the Part B cost. I did the “special enrollment” thing up until the Spouse retired and that coverage ended. That, coincided with my start of SS so I’ve not had to write any checks myself.
@ Larry and EM: Thanks!
I have an older sibling that I will share your comments with. Time is short with that one.
Florida is a homestead state. One of only seven.
DON’T finance a home. Paid off homes are untouchable by law. One of the few things you might be able to count on when they reinstall the diving boards in most urban states.
No income – but NO RENT. Well, except for the property tax tribute.
Read up on this. Don’t blow this off. Such commonsense laws could never be passed today.
:) Hey smartass Bill Maher
Also now retired and on SS and Medicare. They don’t hound you. In fact, you can get by seeing a doctor once per year, until the diseases of long life catch up to you. Then, they want you to die spending as little as possible.
I found a good Medicare Advantage plan, but the No-care thing bothered me. With Trump, I made the switch and am happier for it. My mom, who died almost three years ago, suffered some under No-care. (She’d have been 90 had she seen her birthday this year).
As for me, I am on the sack full of pills (a number of them vitamins) now. I was in the hospital about three weeks ago. The neurologist did an MRI on me and that came back with a possible aneurysm. I am praying that the MRI was a false positive. I expect to have an Iodine Contrast angiography soon. My plan does not hound me. It is the folks at AARP that hound me (and have hounded me for years).