Coffee heat rising

Retirement

i-don’t-wanna-itis…Is God Tryin’ to Tell You Something?

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I don’t wanna. That’s where we’re at here. I just effin’ don’t want to!

The Light has shined down from heaven and illuminated reality: I’m not doing all the things I should be doing BECAUSE…

Yesh, all the things I should be doing:

• Get The Complete Writer ensconced at the PoD site, generate page proofs, copyedit page proofs, update the MS, upload corrected copy, and generate a second page proof

• Ride herd on the e-book builder; if he doesn’t get his act together soon, hire someone else

• Re-enroll in Toastmaster’s and effin’ get serious about it

• Build more and better publicity on Facebook, Twaddle, and effin’ Mailchimp (how do i hate Mailchimp? let me count the ways…)

• Hustle up some speaking engagements

• Fix DropBox on the iMac (disabled by fuckin’ OS 10.11.4)

• Get to work, get to work, GET. TO. WORK!

Well, all sorts of reasons not do do these things present themselves:

• 12 weeks of debilitating respiratory infection

• Updating the Macs’ OS fucked up everything on my computers, making it a) difficult or b) impossible to perform tasks I did formerly with easy keyboard commands.

• I’m way behind in the marketing program.

• I can’t even begin to figure out how to run X, Y, or Z program.

• Maybe the GERD is back. Maybe the respiratory “infection” is the GERD.

• I’m not getting enough exercise.

• I have too much paying editorial work.

• I have to do __(fill in the blank)__ first.

• The pool needs to be cleaned.

• The shrubbery needs to be trimmed.

• The groceries need to be shopped for…

Nope. ‘Fraid not. The truth is, I’m not doing all those things for one simple reason: because I don’t want to.

And y’know what? I think that’s my body or my unconscious or God Herself tryin’ to tell me something.

If they were things that would work,
if they were things that were worth doing,
I’d have done them by now.

Not just by now, but a long time ago.

You know what I do wanna do? As you suspect, it surely is none of the above.

What I wanna do is draft the next scene in my current wildly unpublishable novel. That’s what I wanna do. I wanna write unpublishable novels.

The God’s Truth is that I do not need to write any more publishable copy. No. No, indeed.

The editing bidness brings in plenty of income. In the past year, it’s generated more than Social Security has plopped into my checking account. And Social Security plus the Required Minimum Drawdown from retirement savings is exactly enough to support me, coming out even at the end of a 12-month period.

So…why do I want to do anything else?

Why, indeed?

Probably because it’s just what I do. It’s what I’ve always done: work myself stupid, often for no very good reason.

And here’s the thing when it comes to personal finance, the putative slant of Funny about Money: FIREers: beware. 

You can achieve Financial Independence. You can Retire Early. But you may find yourself, at some level, still feeling driven to do something constructive. And because America measures “constructive” in dollars, you may define “constructive” as paying work.

What if “constructive” work is not paying work? What if it isn’t socially redeeming work, like charity or teaching or loving one’s neighbors? What if it’s not even work at all?

What I’m suggesting is that at some point in life you should do what moves you, even if what moves you is not socially redeeming, not good for the society, and absolutely absent any chance of profitability. Corollary: If you don’t want to do it, don’t do it.

If you can’t force yourself to do it, don’t do it. Find something else to do.

As of today, I’m stopping.

I need to reconsider what I’m doing with my life and do something else. If “something else” is the same as “nothing,” then it’s time to do…nothing.

Suspicions Confirmed! Work is bad for your health

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BBC News reports that, as we have always suspected, work is bad for your health: “If you’re over 40, working more than 25 hours of work a week could be impairing your intelligence,” says a report from Australia’s Melbourne Institute of Applied Economic and Social Research. According to the researchers, your optimum work week is 25 hours.

Alerted to this news flash, SDXB — our model in Bumhood, having wisely retired by age 50 — responds as follows:

Of course it is. Work is stressful, doesn’t pay enough, and diverts our attention from things that really  matter, like leisure and beating the system.  Give me bumhood any day.

hammockonbeach

Image: *Micky* – flickr, CC BY-SA 2.0, https://commons.wikimedia.org/w/index.php?curid=1604366

Of Weather, Dogs, Budgets, Stir-Craziness, and Taxes

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At 5:15 a.m., it’s 93 degrees on the back porch, and overcast. Was going to jump in the pool but then heard thunder and thought better of it. Turned around, came inside, fed the dogs, thought better of the better thought, ran outside, and plunged in the pool, thunder rumbling through the skies.

Leapt out, grabbed the hose, watered the withering plants, and flew back inside.

Now at least my hair is wet and braided, which will provide some convenient personal air conditioning for the next several hours.

Damn near 95 degrees at 5 in the morning means no exercise for the dogs. Cassie, with her thick coat and lion-like mane, has never been able to withstand that kind of heat for more than half a mile. Ruby probably could, but it might not be great for her. The prospect doesn’t thrill the human, either.

It means I don’t get any exercise, either. Could do some physical therapy exercises and yoga, but that ain’t the same as two brisk miles. Oh well.

§

Y’know, in all the years I’ve fed my dogs Real Food, I’ve never kept track of how long a batch of cooked meat, veggies, and starch lasts. Probably scared: I don’t wanna know how much this is costing me!!

However, we now have a hint. On July 15, I made a Costco run that included a giant package of frozen dog veggies ($6.49), a lifetime supply of chicken thighs ($12.64), and a massive amount of pork ($35.55), for a total of $54.68

Divided the pork into three packages. ONE of those lasted 10 days, when cooked with a sweet potato (on hand) and a few handsful of frozen veggies. So that means the $36 worth of pork alone, in theory, should last the dogs for a month.

It’s almost the end of the month. I’ve cooked 1/3 of the pork, half of the chicken, about half the frozen veggies, and embellished the results with about one cup of rice and two sweet potatoes. We have 1½ Tupperware-type containers of chicken-based dog food left — more than enough to last past the 31st. The first chicken cooking will cover 10 days. AND we have the other half of the packaged chicken thighs, still in the freezer: another 10 days! The remaining pork will make another 20 days’ worth of dog food.

30 days: pork
20 days: chicken
50 days: total days covered by Costco run

That means $55 and change is feeding two dogs for almost two months.

Holy sh!t.  I had no idea  feeding them actual, real food was that economical.

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I’ve been adding a few bites of kibble (Whole Foods’ house brand) to both dogs’ meals, because I’ve not been confident that my dog food recipe sufficed for a puppy. (And of course Cassie will not put up with Ruby getting anything that she doesn’t get.) But now that Ruby is over two years old, she can go wholly on real food without risk. I think we’ll switch her over to 100% real food, which will cut the length of time the supply lasts by about 50%. But that should be tolerable. Especially since we won’t be buying expensive kibble.

Cassie is now 10 years old, and she’s incredibly healthy. You would never know she’s advanced in age. Her teeth are good. The terrible dog breath she had when she came to the Funny Farm is gone. No aches and pains seem to bother her. She races around the backyard with Ruby — and believe me, despite the short legs (or maybe because of them) a corgi goes like a rocket. Her coat is gorgeous. She eats well. And when the weather is tolerable, she can walk a mile at a fast clip with no problem.

My son’s dog, who gets nothing but the very best high-end kibble, has red swollen gums and bad breath. He obviously needs an expensive dental job. My son can’t afford that and so continues in denial. And (btw) that dog gets the doggywobbles every time he turns around. A vet claims this is because of a congenital intestinal problem, but that speculation has never been proven; one wonders if the issue would resolve in the absence of commercial dog food.

Cassie and Ruby eat everything in sight, and they never, ever get sick. Doggy diarrhea is rarely seen in these parts, unless one of them finds something weird to eat outdoors.

I first discovered this dawg wellness phenomenon when I started cooking Real Food for the German shepherd and the greyhound, during the late Chinese melamine fiasco. The difference in Anna, the decrepit German shepherd, was startling. She had been so crippled with age that she could barely haul herself off the floor. Shortly, she was chasing her ball around the backyard again, something she hadn’t been able to do in many months.

§

The budget is looking pretty good despite some small overruns.

Last month, on the first, I bought a $50 Costco cash card, solely to buy gas. The first tank of gas lasted until just a few days ago. I now have a full tank, which will probably last until the middle of next month — especially if I opt next month’s junket to Avondale. So apparently in my dotage, it’s costing nothing like $50 a month to buy gas.

As we’ve seen, I indulged myself with a gardening purchase (the composter), which would have led to a budget overrun without the other small surprises. But that may pay for itself this winter when I use it on the proposed vegetable pots.

One reason the budget is so tight at this time of year is that the utility bills are astronomical in this heat. In the winter, though, they’ll drop to almost nothing: both electric and water will fall into pocket change category.

The reason I don’t allow the power company to prorate the electric bill is that I like having a lot of extra budgetary play in the winter, when I want to buy Christmas presents and have to pony up money for church donations. I wouldn’t feel I could afford those things if I had to pay for part of the summer bills all year round. Plus it’s a good idea to be eminently aware of how much air conditioning actually costs you at any given time…

§

We’re basically heat-bound here. I feel like I’ve been in jail all summer. Choir is out during the summertime. I suppose I could go to Church on Sundays and socialize a bit…but organized religion per se is not really my thing. I commune best with the Ineffable in nature, not under a roof.  😉

With recreational shopping out (permanently, it seems), hiking out because of the heat, and the cultural scene in estivation, there’s really nothing to do here but read the news on the computer and work. Hence: a 400-page book in draft, in a matter of days. Amazingly enough.

Thank God for the swimming pool. This summer was the first in two years that I’ve been allowed to get in the water. It’s a life-saver.

Wish it had some kind of shade screen over the top, so I could swim in the heat of the day. When I was young, dumb, and didn’t give a damn, I used to drop into the pool several times a day, just to keep cool. Now…not so much. Too scared about melanoma.

Adventures in Medical Science do that to you: create fear.

The weather this summer has been a real bear, and it looks like this is going to be a permanent thing. My son figures the Valley will remain livable until the mid-2020s, which is about when we’ll run out of the water the Central Arizona Project has been quietly pumping back into the aquifer. But water or no, if this kind of heat continues, the low desert really will become uninhabitable.

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He’s talking about moving to Oregon, if his employer will allow him to work from home — as apparently is in the cards. I don’t know if I could afford to live there…the taxes, I fear, are too high.

SmartAsset.com calls Oregon “moderately friendly” for retirees. It’s a little hard to tell, though, because they don’t seem to take sales taxes into consideration. In Arizona, sales taxes are around 10% — depends on the municipality, because some cities tax food and some don’t. Property taxes are apparently higher because the cost of real estate is higher, and Oregon has no sales tax. It does have an estate tax, starting at $1 million — that presumably would not apply when I croak over. Or I could just start maxing out transfers of assets to my son before I die.

If you believe SmartAsset, it looks like Oregon is comparable to Arizona. In Oregon, you supposedly will pay $1,598 on a $40,000 income. In Arizona, the figure is $480. Huh…how do you suppose they have the chutzpah to put those two in the same category? They can’t possibly be figuring the sales taxes in there. Sales tax amounts to hundreds and hundreds of dollars a year here!

Must say that the prospect of moving across the country doesn’t appeal. I’d have to sell all my furniture, since the cost of a moving van is pretty prohibitive. Once there, I’d have to refurnish with Ikea junk or spend months searching for replacements in estate sales. Ugh! Not much fun, either way.

Heh… In the “very tax friendly” category, SmartAsset lists Alaska, Florida, Georgia, Mississippi, Nevada, South Dakota, Wyoming. :-0 Talk about “out of the frying pan, into the fire!” None of those are places I would jump to live in.

Hm. Ordinary unexceptional “tax friendly”:

Colorado is considered tax-friendly: that’s interesting. I could stand to live in Colorado. None of the others appeal, though, with the possible exception of Idaho and maybe New Hampshire.

Colorado: $1,852 taxes on 40 grand. Idaho: $837. New Hampshire: $0.

Zero? What are they smoking over there at SmartAssets??

Ah: here’s the explanation: SmartAssets’ figures don’t include property taxes. Well, hell. Then their calculations mean exactly nothing. It’s the property taxes that do you in when you’re retired!

Hilarious.

All these gingery calculations you see in the media about where to retire on a shoestring are pretty silly. None of them compare apples with oranges or take all the factors into consideration. For example: how much is it going to cost you to fly back and forth to visit grandchildren? If a state doesn’t have property taxes, how is it paying for its infrastructure? You can be sure the Tooth Fairy isn’t covering the cost of roads and schools…

So, let’s move to Mexico or Colombia, hm?

Those schemes fail to mention that Medicare doesn’t cover you when you’re out of the country. And as sad as America’s healthcare system is looking, our doctors and hospitals are still a lot better than what you’ll find in most of those “affordable” countries. Assuming you survive, say, a stroke or a heart attack, how much will it cost to fly you to the US for quality care? And how much more will your care cost you after medical attention has been delayed for the period it takes you to get transportation back to Medicare Heaven?

Welp. I don’t know if Arizona will remain livable for the remainder of my assigned years. If it doesn’t, I suppose Oregon or Colorado would suffice.

Wherever my son goes…I probably would follow him. Oregon, though: that would be good.

 

Retirement Planning for Gen X

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JestJack replies to Wednesday’s post, in which I held forth on the new formal budget and revealed how much I need to live as a retireee in nominally “middle class” but in fact pretty modest circumstances.

The sad thing is I see no glaring evidence of living beyond one’s means in your or my lifestyle for that matter. But yet I seem to get the feeling you feel, like me, that you are “living on the edge” despite a pretty nice “safety net” to fall back on. I share your concerns on many levels. With poor returns on savings it seems the Fed in their efforts to prop up the economy are doing so at the expense of “savers” …i.e…..seniors. As you aptly point out, there is no substitute for “a paid for home”….that peace of mind is priceless. BUT today’s environment is very tempting. I can borrow money in the form of a mortgage for 10 years at 2.25% with no points and may even get some help with closing for the effort. I just wonder sometimes how folks WITH rent, a car payment, cell phone bills, student loans, utilities and child care make it….

The answer is, of course, that they can’t: not without a decently paid full-time job and a side gig or two.

I’m sure JestJack and I are looking through the same lens that confounded our parents at retirement age: inflation. Though it’s not nearly as rampant as it was during the 1970s, inflation will never go away. So to minds like ours, thirty grand a year looks like a LOT of money. The realization that one can barely get by on it — and only if one doesn’t have a house or car payment — is startling.

And it’s horrifying to understand that one’s “real” income — $14,400 in Social Security benefits — is well below the poverty line. Drawing down from a finite amount of savings is not creating “income”: it’s just using up your resources until such time as no more resources remain.

Thirty thousand dollars — the net amount I need to live on, not the amount I can, realistically, afford to disburse from my funds (assuming my doc’ is right that I’ll live into my 90s — or even if I make it to my early 80s), is untenable. If the entire gross RMD from my savings is consumed by taxes and living expenses each year, in 20 years I will be utterly destitute: I will have nothing left to live on but Social Security.

“Twenty years” assumes I don’t get warehoused in a nursing home, which will eat up $4,000 to $6,000 a month. That will impoverish me a whole lot sooner.

For anyone in their right mind, this represents a HUGE psychological disconnect. If you are a young person, it means the amount you will need to support you in comfort through retirement is far more than you can realistically expect to earn and save over your lifetime.

Net Social Security — $14,400 — is nothing like enough to live in a safe neighborhood, with decent food, adequate clothing, and independent transportation.

It’s poverty level.

Yet it’s almost $2,500 more than my boyfriend in college regarded as the income he hoped to have when he was “set”: a target he figured would support him and a family quite comfortably (at a time when most women didn’t work). I can remember young men, including my young lawyer husband, remarking that they would have “arrived” when they could earn $12,000 a year. Twelve grand in 1969 would be worth $78,551.28 today.

In that light, the numbers we’re looking at in Wednesday’s post don’t compute.

Even an income of twice what a young man in 1969 regarded as comfortable affluence would support a retiree, today, just barely. It might not support two people at all. Certainly not in middle-class circumstances.

If I were going to advise young people planning, very long-term, for retirement, I’d say “Figure out what you think you’ll need per year, and then multiply that figure by three. That’s how much you’ll need as a net annual drawdown from retirement savings, since there’s a good chance the Republicans will cut Social Security or make it go away.”

So. If a man in his late 30s thinks he’ll need $30,000 a year, exclusive of Social Security, to live in the splendor I enjoy just now, then in another 30 years, he should figure he’ll need enough to DRAW DOWN at least $90,000 net per year.

Gross, that’s probably about $100,000 per year, after taxes and Medicare. Let’s say he retires at 70 and he hopes to make it to about 90.

Let’s suppose Social Security survives and increases with inflation. In 2046, my $14,400 net annual Social Security benefit will have bloated to $30,205. That leaves “only” $69,800/year for our Nimrod to come up with by way of keeping a roof over his head in retirement. To maintain that between retirement at age 70 and death at age 90, he’ll need $1,396,000 in savings at the time he quits or is forced out of his job.

That’s a bare minimum. It means…

• No eating out in restaurants
• No travel
• No entertainment that costs anything
• Purchasing all clothing in second-hand stores
• Purchasing any needed furniture or household appliances second-hand
• No car purchases
• No mortgage payments
• Not even cable TV or a cell phone

And that figure doesn’t account for inflation over the 20 years of his retirement.

To retire in what most Americans regard as near poverty, today’s young men and women will need almost $1.4 million in savings. In cash dollars.

That’s assuming they plan to leave nothing to their children.

Downsizing: Is It Worth the Cost?

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Recently Money Beagle ran a guest post whose author suggested that moving to smaller digs may not be the best choice for all of us as we fade into our dotage. It touches on a thought I’ve been ruminating on: the question of whether I should downsize now, while a) I can afford the costs and b) I still have the health and physical strength to engineer moving to another house. Actually, the question is whether downsizing is a good idea at all.

My house has four bedrooms. It sits on a large lot, almost a quarter of an acre. It has a large pool and a forest of trees. How much does one little old lady need to air-condition, heat, clean, water, trim, and maintain? Wouldn’t it be cheaper to move to, say, an apartment in Scottsdale? Or one of those trendy lofts downtown? Or a nice single-story patio home with no yard to take care of?

Or maybe at my age, with about 15 years of tolerable life remaining — at the outside — maybe it’s time to move into a life-care community?

Well. I wonder. Let’s consider the costs.

First, to sell this house:

6% off the top to the Realtor (the better ones in these parts get 8%): $16,500, on my $275,000 shack
Recording fees: $150
Escrow fees & title insurance: $2,500
Prorated tax: up to $2,500
Termite inspection: $300
Home inspection: $300

That doesn’t include a home warranty for the buyer or any blandishments you offer, such as a flooring allowance or a home warranty. Nor does it count the costs of repairs and upgrades at the new digs — how many of us have had to replace a water heater or a garage door within six months of a move? And do you really want to live with that harvest gold Formica countertop for the rest of your life?

If you’re at the age where downsizing makes sense, you’re past the time of life when you can pack up all your possessions and bribe your friends with beer to help you stuff your furniture and boxes into a U-Haul and then drag the stuff into a new house. That means you’ll need to hire a professional moving company, an expensive transaction: $2,000 for a local move; cross-country, $8,000. You could, of course, hire an estate sale company to yard-sale all your earthly possessions and then buy new furniture when you get to wherever you’re going: it costs about $10,000 to furnish an entire house. Probably less if you buy Ikea junque, but again: at “downsizing” age, who wants to live with Ikea’s kid-engineered throw-away gear?

Let’s see what we have here… Total cost of selling and moving: $22,250 (a conservative estimate). That’s 9% of the property’s likely sale value.

My house is paid for. To avoid a mortgage, I’d have to use the net on the house sale to buy the new place. But that place will have to cost about $25,000 less than I can get for this one. Let’s imagine that for $250,000 I could find something I’d want to live in, located in a safe, middle-class area that is NOT a retirement tract like Sun City. I’ve but begun to pay…

Buyer’s closing costs and moving cost for a house purchased in cash go like this:

Close of escrow: $250
Title insurance: $1350
House inspection fees: $200 to $400
Recording fees for deed: $50
Title company closing fee: $400
Property transfer tax: up to $1,000
Attorney fee: $500
HOA transfer fee: $300 to $400 (n/a in my part of town, thank goodness)
Moving fee: $2,000

Total cost of buying the smaller house: $3,550.

Most places I’d want to live in cost upwards of $300,000 these days. That would require me to take out a mortgage. So to the ~$3550 in buyer’s closing costs, we can add the exorbitant cost of taking out a mortgage. To get into a $300,000 patio home I’d have to come up with at least $50,000, assuming I put down everything I net from my home’s sale. It’s unlikely that I could get a mortgage for a sum that small, but let’s pretend…

Lender discount points, about 1%: $500
Loan application fee: $500
Credit report fee: $85
Loan processing fee: $75 to $400
Document preparation fee: $50 to $250
Property appraisal: $400
Prepaid loan interest: Heaven only knows!
Insurance escrow: about $150
Tax escrow: about $1500

I’m not including flood insurance or a flood certification fee because you couldn’t pay me to buy in a flood zone. So the upfront cost of taking out a small mortgage would come to $3,785 — and that doesn’t count the cost of 15 to 30 years of interest payments. So… Cost of buying a smaller house in a more desirable part of the Valley, with loan: $3,550 + $3,785 = $7,335.

Cost of selling present home + moving van and workmen + buying a lesser house in cash: $27,800 – 28,150.
Cost of selling present home + moving van and workmen + buying a smaller house in a safer part of town: $35135 – 35,485.

Y’know… You could pay for a lot of lawn service and cleaning-lady visits for $35,485.

So let’s say you hire a cleaning lady because you’re feeling too frail to scrub, scour, vacuum, mop, and dust — I believe La Maya pays her housecleaner about $80 to $100 per visit (though her house is a thousand square feet bigger than mine). Xeric landscaping costs just $85 or $100 for monthly clean-up & grooming. Cleaning lady comes in a couple of times a month; that makes her cost $160 to $200. So routine maintenance of the existing manse would come to $300/month. The $35,485 it would cost you to downsize from a midsize tract house into a cottage would cover 118 months of routine house and yard maintenance, during which you would never have to raise a finger to clean or do yardwork. That’s almost ten years!

From one point of view, then, it would take around ten years to recover the cost of downsizing from a four-bedroom house on a quarter-acre lot with no neighbors sitting on top of me to a two- or three-bedroom apartment or townhouse in a rabbit warren, complete with HOA fees and politics.

Because I’m in the Salt River Project, my utility bills are low. Because I live in an old neighborhood, I have no HOA fees. Probably on average my total utility bills for electric, water, and gas run about $425 a month — less than that, really, because winter power and water bills are very low and in the summer, the cost of natural gas is nil. In a “better” neighborhood, I’d be in the Arizona Public Service district, where power bills are much higher. And many parts of Scottsdale and North Phoenix have no gas service, so the stove, water heater, and central heating run on expensive electricity. Utility bills in a smaller house could  easily exceed what I’m paying here.

The pool costs about $40/month to run and maintain (exclusive of repairs). The yard guy: $85/month.

In a patio home, yard and pool maintenance costs would disappear, only to be replaced by a monthly HOA fee. From what I’ve seen at places I’ve looked at, $125 a month is not an unusual HOA charge.  At Pebble Creek, for example, the HOA fee is $250 a month. For an apartment…uh, condo…about $100 to $125 is probably average. So costs to live in the smaller place would probably be about the same as I pay here. The only real advantage would be fewer rooms to clean and less outdoor space to have to maintain.

So, if there’s no advantage in utility and maintenance savings, why spend $28,000 to $35,500 to move?

• It would be worth it if your neighborhood were deteriorating.

The opposite is happening here: this neighborhood, like the entire central city, is gentrifying apace. My neighbor sold her house — only 340 square feet larger than mine, on the same size lot — for $285,000. It hadn’t had a serious upgrade since it was built in 1971. The kids who bought it have spent months in renovation.

And, we might add, every other young couple and every other fix-and-flipper flocking to the ‘hood have done the same.  If the slumlords to the west of Conduit of Blight get some help from the government, they could make a handy profit by condo-izing the deteriorating apartments that now front on the urbanite-friendly lightrail line, thereby getting rid of a major source of crime and rescuing the school that was overwhelmed and ruined when the city allowed the people warrens to go in. It’ll take some time before any such thing happens…but if it does, the property value increases we’re seeing now will look modest by comparison.

• It would be worth it if you wanted a zero-maintenance place where you can lock the door and take off for weeks and even months.

In Arizona, many ordinary houses meet that description. An intelligently designed xeriscape can look very nice and need almost no regular maintenance.

• It would be worth it if you lived in a place with a harsh climate.

Arizona’s summers are pretty fierce. On the other hand, for $40 a month plus occasional repairs, the pool makes the summer heat tolerable. Electric bills to power air-conditioning run about $230 a month, hardly enough to break you up in business. And again: at $40 + $230, the $35,485 would pay those bills for 10 years. How much are winter bills where it snows? Or where it’s foggy and chilly year-round?

• It would be worth it if your kids moved out of town and you wanted to live near them.

Maybe. Following the adult kids to some new locale can be a recipe for depression. Your grown children may not feel very invested in spending large amounts of time with you — except insofar as needed to obtain free babysitting services. Meanwhile, you’ve left behind friends who want to hang out with you, to say nothing of your favorite shopping, your church, your clubs, your cultural life, your beloved doctor, your competent dentist, the only hair stylist on the planet who can cut your hair the way you like it…

Overall, then, if your present home is in good repair and in a reasonably safe neighborhood with nearby shopping and lifestyle infrastructure, downsizing to a smaller place could represent not a savings in maintenance but a net loss, one that could extend over quite a few years…possibly to the end of your lifetime.

So: think twice before jumping into the downsizing pond.

Annuities?

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What d’you know about the annuity as a vehicle for retirement strategy?

I’ve always been dubious about them. However… I have a friend, whom I’ve now known for five or six years and whom I believe to be fundamentally honest and above board. Part of his business is financial management, and one his favorite strategies entails setting clients up with annuities.

He points out that if I took about $300,000 of my vast riches — approximately half of investments and cash holdings — and put it in a lifetime annuity with a death benefit of 300 grand, I could generate more than the amount I need to live on for the rest of my life, still have money invested in securities, and leave a guaranteed $300,000 to my son when I croak over.

Given my chronic bag lady syndrome, this sounds pretty tempting.

My concern is that if the prominent oncologist who de-boobed me is right — that I should live to about 95, barring accidents and unforeseen circumstances — I will outlive my money by ten or twenty years and than spend advanced old age in serious poverty.

I do not want to continue teaching freshman comp courses, a job I truly dislike whether in the classroom or online, and I’m certainly not betting that publishing Racy Books for Racy Readers is going to make me rich. Right now I can’t even get accursed Amazon to let me create an Author’s Page for our pseudonymous scribbler, Roberta Stuart.

So, assuming no money is going to come in from side gigs or the S-corp, and knowing the government is shearing the hell out of my savings by forcing me to take large required minimum drawdowns just as the stock market heads back into negative territory, I’m thinking an annuity that would return enough to live on would give me some peace of mind and also allow me to preserve at least SOME capital as I age. And also leave at least something for my son.

Two drawbacks come to mind, as I consider this scheme:

a) it locks up $300,000, which presumably I will never be able to access again; and
b) the payouts do not seem to be inflation-adjusted.

Even though we’re not seeing much inflation now, it would be absurd to assume that we won’t in the future. My father’s retirement was devastated by the inflationary period of the 1970s, which reduced a healthy savings account to…well, not enough to live on. He had signed himself into a life-care community just as that period started, so at least he had a roof over his head and a couple of meals a day. But because of the loss of his dollars’ buying power, he did not have enough to do much other than stay underneath that communal roof and eat in the (awful!) institutional dining hall. That’s even though he started out with the 1960s equivalent of just over a million dollars!

That, IMHO, makes for quite the dreary lifestyle.

US politics grow increasingly negative. Some extremely dangerous fools are trying to attain power, and sooner or later they will succeed. When that happens, the US economy will become even more unstable than it is. So, runaway inflation — or another profound recession like the one that’s taken us 8 or 10 years to come out of — is a distinct possibility. I have no faith in the country’s economic future, and I do not believe the stock market alone is a safe place to keep all of one’s savings.

Nor, obviously, is stuffing the mattress with gold bullion a great idea. The insomnia factor aside, gold bars are too heavy for an old bat to haul to the grocery store.

I’ve talked with WonderAcccountant about the annuity question, as well as the highly knowledgeable Evan at My Journey to Millions.

WonderAccountant thinks I don’t really need to set up an annuity, as she believes there’s enough money in securities to support me into my old age, no matter how much I take out, but she suggests the peace of mind could be worth the hassle and the risk. Evan observes that some annuities are excellent retirement strategies and some are not: they’re complicated instruments that you need to understand fully before you buy.

So, I’m thinking about it.

Even if most of my money were drawn down by the time I died, if I invested half of it in an annuity, my son would inherit my paid-off house and also the $300,000 death benefit. The house is probably worth $280,000 or $300,000 now — but we know how reliable those figures can be. Nevertheless, with a paid off house in hand, he could either sell the house he’s in or rent it, providing a little cash flow for him. Or he could sell this house and use the proceeds to salt his own retirement savings.

But…do I really want to tie up half my savings in an instrument that’s not inflation-adjusted? Twenty-five or thirty grand now sounds, well, just grand. But in ten years, even if inflation stays low, it won’t be enough to keep me going. In 20 years, when I’m 90, I‘ll need over $45,000 to buy what $25,000 buys today. And as for that $300,000 death benefit: if I die at age 90, it will take $541,833 to equate to today’s 300 grand. It will be worth a little more than half of what it’s worth now.

That assumes an inflation rate of just 3%, staying stable over two decades…