If it’s the latter, you should really crunch the numbers. It may actually save you money in the long run to take it now and pay extra. (You might also be able to talk to HR about getting out of the U’s health benefits? Probably not, but still..)

As I recall, Medicare costs increase exponentially per month that you don’t take them. So if they’re going to be so much, why not do the math and figure out what the costs would be (now and over time) if you took the damned things now?

Yes, it’s silly to pay for everything (though, really, you can just get Medicare and not use it; there’s no penalty, as I recall, for not signing up for Plan D and such right away) but it’d be sillier to not pay $100 or so more a month now all to pay over $300 a month later. My guess is, you may actually save money this way.

Let me know what you find with those numbers.

Reasoning, Part 2: The several funds I own — a large IRA with Fidelity, the 403b with Fidelity, the 403b with TIAA-CREF, and a half-dozen Vanguard funds — contain a surprising amount of cash. Just the one Dick and John manage, which holds about half my total savings, regularly generates significantly more than the $800 drawdown to cover the house: last month we drew down $800 but the fund made $7,825 AFTER the drawdown.

Obviously, during the recent downturn, that fund lost money, which was alarming. However, when the market is behaving normally — that is, not frolicking with irrational exuberance — the fund makes more than it loses. My total investment portfolio gained $15,000 last month. It appears that the total amount of savings, actively managed and conservatively invested, will on average earn enough that, at 5%, it will take longer to draw down the entire amount than I’m likely to live.

My original goal was to accrue enough that I could live solely on investment income plus Social Security, so that the entire principal could go to my son. Before the crash, that was the case. But obviously, it’s not going to happen now, what with my being forced to “retire” in the middle of a major recession. But something certainly will be left for him. Plus my house, which is paid for, is worth a nice little chunk of change.

I’ve heard that most advisors recommend a 4% to 6% drawdown, which would put the proposed 5% figure in the realm of reason. Seven percent is more than I want to do — and I don’t think it will be necessary.

As for the downtown house: once it’s sold or rented, I can live nicely on a 4% drawdown, or continue with 5% and quit working at the junior colleges. I am quite certain that within the next few years the value of that area will go through the roof, just as it has in other residential districts along the lightrail route. All of the centrally located districts in town have held their value or increased (houses comparable to mine are selling for about $48,000 more than I paid five years ago). The reason we’re upside down with the jointly owned house is that a number of speculators bought into the area with the same idea, only they thought they could flip the places. They bought too late and were caught in the real estate crash, leading to several nearby foreclosures. We have plenty of resources to hold onto the house–we’re not about to go belly-up. Even though I recognize the risk, I think it’s a risk well worth taking. We are going to make a profit on that place, and in the meantime, my son is not living in a dangerous firetrap.