Coffee heat rising

Month: January 2009

Busy day today

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Won’t be getting much blogging done today. I have to be at the campus by 2:00 (meaning I have to leave here by 1:00) for a memorial service for the Grand Old Man of the history department, who passed a month ago under difficult circumstances. Quite some time ago, before I realized I would be hosting the Carnival of Personal Finance on Monday, I also promised to have dinner with an out-of-state colleague who spent the fall semester as interim director of a program in that department, she having come back to town for the service. So that will keep me in lovely downtown Tempe all afternoon and into the night.

It also hugely truncates the time available to work on the carnival and do all the weekend chores. So, if I don’t have much to say today and tomorrow, don’t go away. It’s not that I’ve forgotten you.
🙂

Carnival of Personal Finance Comin’ Our Way

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Next Monday, Funny about Money gets to host its first Carnival of Personal Finance! I’m reading submissions now and getting a big boot out of them.

I love hosting carnivals. It always introduces me to sites that I didn’t know about, and it allows you to read a lot of posts you might not have come across. And to review some that you have.

So. If you blog on personal finance, be sure to send a submission by the Sunday deadline. Here’s the link to the C of PF.

Teapot’s tempest loses steam

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Hmmm… This furlough thing may not be the disaster initially envisioned. Instead of requiring people to take a day a week, as was our first impression, HR (always a fount of accuracy…) is saying they expect employees to take one unpaid day per paycheck.

  • For faculty working and paid on a 12-month appointment,this furlough program will beginJan. 30, 2009(pay period 1.26.09

Update on layoff vs. retirement benefits

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So I called the state’s General Accounting Office, by some miracle reaching the woman who manages RASL, the state benefit whereby employees get paid a portion of their hourly wage for each hour of accrued sick leave they’ve accumulated. You could hear her hair rising off her head to stand straight on end as I described the story I’d been told: that a layoff means you lose all your RASL.

Nay. Nay verily. She told me that was absolutely, positively not true.

Termination, as it develops, is separate from retirement. You may be canned for any reason ranging from budget-driven layoffs to being caught with your fingers in the till while screwing little boys. That is irrelevant to retirement. Retiring is a different process. To get your RASL, all you have to do is arrange to start your retirement within 14 days after your last day on the job.

Layoffs, she declared in every way she could think of, do not, do not, do not affect your earned retirement benefit.

Thank God!

Nice, eh? This factoid came to me first through the rumor mill, which you would expect to be inaccurate. But then it was confirmed by HR! There’s where the strategy to declare fake retirement plans was actually hatched.

Now all I have to do is perch up here like a sitting duck and wait to be laid off. At least I don’t have to cook up any schemes to make it look like I intend to retire when I most certainly do not.

Not that I wouldn’t like to.

Early practice for early retirement

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Wow! I just figured out what the furlough means to my budget. My hourly pay is about $30 an hour: that’s $240 a day. If they make me take one unpaid day a week for the next 12 weeks, that’s a gross pay cut of $480 per paycheck or $960 a month. My net biweekly pay will drop from $1,537 to $1,215. That is less than my reduced budget for nonmonthly recurring bills (i.e., it’s less than I spend on groceries, household and yard products, gasoline, and nonrecurring bills such as the vet or the plumber).

furloughjpg

It’s less than I would earn if I retired, took Social Security and 4% of my savings after the Investment House mortgage, freelanced, and taught two sections of freshman comp at a community college.

yr1retirement

Now, there are some mitigating circumstances here.

First, that retirement net income doesn’t reflect the astonishing cost of Medicare, which, by the time you pay for Part D (the required prescription insurance that drops you into a “doughnut hole” if you get sick enough to really need a lot of medications) and the supplemental insurance needed to pick up the slack, comes to around $300 a month. Right now I pay $26 a month for a plan that covers everything, including the Mayo Clinic and prescriptions, with $10 or $20 copays. Because I’m not yet at Medicare age, if I quit now I’d have to take COBRA, which will cost $475 a month.

Second, the fact is that today we get our so-called “extra” biweekly paycheck. It can be prorated out over the next twelve weeks to help cover the shortfall. It means I won’t be able to use it as part of my emergency savings in case of layoff—which, frankly, I believe is a near certainty. However, it will help.

And third, we can claim unemployment for each furloughed day. That will be a HUGE hassle: you apparently have to fill out all the forms and jump through the hoops for every single claim. So it may not be worth the trouble. But it’s there.

Any way you look at it, the “golden years” of my life are going to be pretty gray. You can see from the above that the amount I will have to live on under the best of circumstances—working two part-time jobs—will be very limited. When I reach the age when I can no longer work, which won’t be many more years from now, I will be living in poverty. Even after we sell the Investment House and I can use the full 4% drawdown from my life savings, the numbers look like this:

ssprojection

I can’t even begin to imagine how I will live on that, with $300 (or, by then, more) taken out for Medicare.

Well, one good thing about this furlough business: starting today, I’m going to get some practice at living on it.

Furloughed! Parboil the fruits before canning?

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Well, I found out about it from NPR news first, while driving home through the interminable rush-hour traffic: every Great Desert University employee is to be furloughed between now and the end of the fiscal year, June 30. When I raced in the house and pulled up my e-mail, yea verily, there was a message from Our Beloved President, outlining the plan to balance the university’s budget on its employees’ backs.

Administrators are being zapped for 15 days—that’s three weekswith no pay! Classified staff, which would include my associate editor, who earns less than she was earning as a graduate research assistant, get off with a mere ten days. And everyone else—that would be moi—will face 12 no-pay days.

Apparently we’re being allowed to string it out over the rest of the fiscal year; 17 1/2 weeks. The particular configuration of the furloughs, though, depends on one’s supervisor’s whim. So, for me, if they allow me to to take off one day a week, that would cut my pay by two days for each paycheck—$480—between now and the end of the fiscal year. Assuming, of course, that I last for the rest of the fiscal year.

Think of that: a $480 pay cut. Thank you so much, Georgie Porgie and all your doctrinaire ideologue puppeteers!

We can, we’re told, claim unemployment insurance for the unpaid days. Unemployment in Arizona is pretty piddling—a tiny fraction of what you earn. And it’s such a hassle to claim it that if you have any other source of income to fall back on, it’s hardly worth bothering.

Our bread-and-butter client just e-mailed asking if we’ll take on not one but two new projects. You betcha, sister!