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Archive for January, 2020

Learning a Little About Medicare

January 30th, 2020 at 07:52 pm

HR hosted a Medicare webinar this week that all colleagues were invited to attend. Though I’m a decade away from Medicare, I’m not knowledgeable about it and it’s an aspect of retirement planning I should consider. So I attended. I was surprised at how few people attended and I think I was the youngest one. The person presenting the information was not from the company but from an organization that offers Medicare consulting services. The positive aspect of that is that she knew the topic inside & out. The negative aspect is that she was presenting an informational seminar to sell their services, so it was clearly in her best interest to make the topic complex and to be biased toward over-insuring.

The seminar was informative and I did glean some information for my planning purposes.

As to the components and their costs, I took these notes:
Part A – covers inpatient hospital & hospice care. $0 premium. $1408/occurrence deductible + co-pays after 60 days
Part B – covers doctors & medical services. $145 - $492/mo/pp premium depending upon income (rolling 2-year look-back). $198 deductible, then 20% coinsurance. Covers Part A deductible.
Part C – supplemental medical insurance. 2 types & various choices. ~$160/mo/pp premium.
Part D – prescription drugs. ~$33/mo/pp premium. $435 deductible.

Enrollment is not automatic and the initial enrollment period is 7 months long – 3 months before the birthday month, the birthday month, and 3 months afterward. After that there are forever-penalties that are tacked on to the premium if you enroll late in a component that has a premium.

It’s not a high deductible plan so you can’t contribute to an HSA any longer but you can use funds from an existing one to pay expenses including the costs of the premiums for Part B or D and some Part Cs.

Based on my knowledge of Medicare now and my personal values, I plan to take these actions:
(1) Enroll in Medicare just before my 65th birthday
(2) Make sure our income keeps us at the base premium level for Part B, beginning the year DH turns 63.
(3) Skip parts C, D and plan to spend that money on health-promoting activities instead.

Is there anyone using Medicare now that has tips or gotchas for the rest of us to know for planning?

Unexpected Financial Gain

January 29th, 2020 at 11:45 pm

I noticed something financially wonderful today – the company’s stock value increased by $2 / share!

This helps me in two ways:
(1) I have company stock within my 401k account so the account's overall value took a jump in the right direction, crossing the next $100k milestone.
(2) I have some company stock options that are now worth more - on paper at least because most of them aren’t yet vested. But it has the potential to be a chunk of change in a few years.

I'm glad I'm blogging now. I'll revisit this entry next time I have a rough day at work!

Help wanted: Assertive salesman with a teller disguise

January 28th, 2020 at 07:52 pm

A few days ago I went to make a cash deposit in person at a PNC branch. The teller behind the counter made the deposit as typical but then began asking me about credit cards. Do I use rewards credit cards for everyday purchases? Was I aware that PNC had a rewards card? Etc. “We want to make sure we’re meeting your needs.” Yeah right.

I don’t know if I’m just a grouch, but I don’t like being treated like a sales prospect while I’m conducting business. Sam’s Club has gotten this way too. You can’t just check-out anymore without getting a sales pitch for something else.

Money Management For Our Kids

January 25th, 2020 at 01:46 pm

Yesterday DS3 bought a truck and a 4-wheeler! I was surprised since he hadn’t discussed it with me, but he’s 18 now and he used his own money.

When our DS1 was very young I read several articles about teaching kids money management skills. I was interested because I felt like WE were just learning money management skills at that time and I didn’t want to repeat the cycle of learning about money ‘the hard way’. [I ought to blog sometime about our ignorance and some of our terrible decisions during those days…] One thing struck me as I read the articles: kids can only learn to manage money if they have money to manage. So based on that premise, I created our family’s money program for kids and though I would tweak some things if I were to start again, overall it has been effective. My boys know so much more than I did at their ages – all of them.

We started an allowance at age 5. The DS received one quarter per year of age each Sunday. Then beginning at age 10, he received 50 cents per year of age each Sunday. At age 13, it bumped to $1. At age 15, it bumped up again to $2. At age 18, it stopped.

It wasn’t just the amount that was progressive – the financial responsibility was too. So at age 5 he just paid for candy and extra toys. I never had to say “no” to a kid whining for candy in a check-out aisle. Instead I said “Of course you may have those M&Ms – did you bring your money?” Or “Do you have enough?” By age 15, the boy was expected to pay his own entertainment expenses including gas, movies, dates, and also buy his own clothes. I didn’t have to debate about what clothes brand was ‘cool’ and acceptable – he could buy whatever he wanted. Also at age 15, I opened a checking account at the credit union and began direct depositing the allowance instead of using cash. That’s when he received his first debit card.

The boys also had chores but they weren’t linked to the allowance. The chores are mandatory because they live here – only some special jobs qualify for payment and they’re optional. Over the years I sometimes gave advice, even unsolicited advice, but I never made rules about how money was spent or saved. They decided for themselves whether some expensive things were worth it and they learned fairly young how to calculate sales tax. They’ve learned what banks do when your account gets even a teensy bit negative. Recently they’ve learned that when you sign up for a deal online sometimes there’s VERY small print that indicates that you’ve really purchased a subscription and the company will hit your account every month.

At age 12, I established a savings account for the DS and I agreed to match contributions, BUT the savings could not be touched until age 18.

When he turned 18, DS1 had a princely sum of $350 in that savings account. For six years all his savings efforts plus matching contributions: $350. He even had a job for the last few months of that time. DS2 decided when he turned 15 that he didn’t really need $30/week so he requested to have $10/week put into his savings. With matching, that was $20/week. (Yes, it did hurt a little…) At age 18 he had $4000 saved up. He asked me then to show him about investments so I helped him set up a Roth IRA. He could only put about $1200 in it that year because it’s all he earned. So now DS3 just turned 18 last month. He also had parts of his allowance directed to the savings like DS2 plus he would occasionally hand me money earned from a job. I once had to double $900! He also heard from DS2 how much more investments earn than savings so when he was 16 he asked if he could put some of his savings in a brokerage account so long as he still didn’t touch it until 18. I agreed to that. He had just over $7000 in the two accounts combined when he turned 18. I think he’s probably just spent the savings money and left the $2000 in the brokerage account. As for DS4 and DS5, it appears that they’ll be somewhere in the middle. One has between $1k and $2k and the other between $2k and $3k. The one with more requested a brokerage account too. They’ve still got a year and half before they turn 18.

What’s interesting is they all learn from one another. In some ways DS1 was at a disadvantage because he was first. But even so, it’s about learning lessons while the stakes are low. He was recently eligible to sign-up for a company’s 401k for his student job while in college and he did make that choice because he’d learned the value of automatic savings from his brothers.

January Health Habit

January 23rd, 2020 at 02:40 pm

My 2020 goal #2 is to adopt a permanent health-enhancing habit each month. I’ve decided that my new health habit for January will be to fast one day each month. This is an uncomfortable change for me but I’m convinced that it’ll be an improvement.
For January, I am going to have the 31st be the fast day. Then if I can make it 2 days, I’ll knock out February’s day too. I’ve read that 3 days is optimal, but I just don’t know that I can do it.

Fast 1 day per month

Improves cardiovascular health, improves insulin sensitivity, promotes longevity, decreases inflammation, improves cell recycling, protects brain

Upfront – zero
Ongoing – zero

It could be that there is a cost-savings, but I’m not counting on it. I’ll probably drink herbal teas during the day so that may cost about the same as food. (Coffee is allowed but I don’t like mine black.)

Winter Utilities

January 22nd, 2020 at 01:49 am

We just received our gas bill and it’s $208.53 this month. Ouch!! I see from the usage chart that it’s about the same as last year so I really shouldn’t have been surprised. What’s more scary is looking at February and March – if this year is like last year, we’ll have another sharp increase next month.

In addition to the central air, we have a gas fireplace, which I love. It heats up the family room and makes it cozy and inviting. So I’m not willing to shut it off, but I’ll monitor the thermostat, open the curtains on south-facing windows, make sure the garage is closed, … what else?

The HSA Account

January 21st, 2020 at 03:12 am

Since I’ve gotten my first paycheck of the year, I’m checking the accuracy of my deductions. The company where I work had an enrollment period for our 2020 benefits during November. As typical, health insurance premiums increased some. Most other benefits remained the same. But there was one odd change – the company’s contribution to our HSA accounts DECREASED by 500 bucks. No explanation. That’s like a small pay cut. I don’t like when negative changes are implemented quietly – it seems sneaky. In fact, I wonder how many of my colleagues noticed. As an aside, this reminds me of my experience with banks. PNC and Ally both have fluctuating interest rates, but Ally sends a notification every time the rate changes, regardless of the direction. PNC never has sent a notification. Guess which bank I trust more?

Anyway, since the HSA maximum contribution increased by 100 bucks (to $7100) in 2020, my company’s contribution decreased by $500 in 2020 (to $1000), and I’m eligible to contribute an extra ‘catch-up’ $1000 because I turn 55 this year, that leaves me with an extra $1600 to fund or $133 more each month than last year. About $592 total each month.

When the company moved to a high deductible plan years ago, it was a scary change. But in hindsight, it was a good move for our family. We’re a healthy bunch overall. Last year was pricey with two using braces-alternatives and the DH getting an MRI for knee pain, as well as typical doctor visits for bumps & bruises. (Boys and sports…) But we still didn’t come close to using the year’s contributions. So the HSA account has been building up. I’d like for it to reach a ‘safety net threshold’ of being able to cover 18 months of COBRA premiums in the event that the company and I part ways. Based on the company’s year-end statement, the total monthly premium for our family coverage is just over 2 grand. [I pay about $450 of that currently which admittedly is a good deal for a family of 7.] So my safety-net value for the HSA would be $36k. I’m about $10k shy of that now. Maybe within the next two years though? It would just be for peace of mind – my planned exit is not that soon.

Final Tuition Bill

January 17th, 2020 at 01:59 pm

Well for DS2 it’s the final bill. He expects to graduate this May. The tuition & fees bill from the university is just under $11,000. Each semester we cobble together funds to pay for college so for this bill the funding looks like this:

$6200 funds from 529 account
$4200 half of scholarships received
$600 cash set aside

529: This is our last withdrawal. The account for DS2 is now closed. I like closing accounts – it makes me feel like I’m simplifying my financial life.

Scholarships: I made a deal with DS2 that if he brought scholarship money in, we’d split it. As a result, he brought in $2500 his junior year and $16,000 his senior year. I wish I’d made the deal sooner – we paid full price for his freshman and sophomore years. I’m pleased to know that he used his share to fund his Roth IRA for 2019. [Not all my boys are so responsible – this one gets it.]

Once I pay for the remainder of his rent ($500 x 6 months), food ($200 x 5 months), and electricity ($20 x 7 months), then I can say that I’m DONE with DS2’s college costs. There will probably be some graduation fees too – hopefully they are minor. Then I’ll focus attention on DS3’s upcoming costs.

Back Home

January 16th, 2020 at 05:45 pm

I’ve just returned home from a week-long business trip. Now in addition to catching up with my personal tasks, I need to sort receipts and submit my expense report. Traveling for work does provide some opportunity for personal financial benefits, but there are drawbacks too. To take a look at the personal financial impact to me for this trip:

(1) FOOD – gain. The company paid to feed me for a week that I would have spent had I not been traveling. This saves me 1 week’s worth of food costs. (but I’m still paying to feed the rest of the family while I’m gone of course)

(2) CAR MILEAGE – gain. Not much mileage on this trip – just transport to the airport, but with the reimbursement set at over 50 cents per mile, our Honda Fit is doing her share to contribute!

(3) CAR GAS – break-even. I think our car got just as much use at home as it would have if I’d been here. [My commute is from the bedroom to my home office on a normal day.]

(4) UTILITIES – break-even, maybe a loss. Since the family was still here, we still had gas, electricity, and water usage. Maybe fewer flushes & baths, but on the other hand, I doubt they monitored the thermostat like I do. I did turn off the heat in my home office (separate system) while I was out. So for this one, I’ll have to check our bills when they arrive.

(5) CREDIT CARD POINTS – gain. The company pays the airfare directly and I didn’t have hotel costs (explanation to follow) so I didn’t spend a substantial amount. But the rental car, groceries, meals, and luggage fees were all paid with my card. And for the last time, it was my Ally Cashback credit card.

(6) AIRLINE POINTS – gain. I don’t travel as frequently as I did years ago so this isn’t a big benefit, but it does eventually add up. About every 2-3 years I redeem my airline points for some purchase. (I don’t want more travel.) Last time it was a men’s bike for DS5, worth $200+.

(7) MAKE-UP – loss. I don’t wear much make-up when working virtually, but when I’m on-site it’s a ‘full face’ every day. This cost is minor because I still tend to replace make-up before I use it up because it’s old.

(8) CLOTHES – loss. Dry cleaning: the clothes I wear at home are wash & wear, and while the blouses I wear for customer-facing engagements are laundered at home, the trousers and skirts are dry-clean only. I have them cleaned after about half a dozen uses, I’d estimate.

(9) RELATIONSHIPS – non-financial personal gain. This trip was to the city where my brother lives so I stayed with him. Getting a company-paid trip to see family is a plus for sure! I can’t count it as ‘savings’ because I wouldn’t have made the trip regardless – maybe it’s like one of those Mastercard commercials. “Priceless”. With agreement with my company, when I stay with my brother I expense groceries or a dinner out for him and his wife. Cheaper for the company than a hotel and a bonus for my brother. This trip I bought them about $200 of groceries. Good quality too – organic, wild-caught, etc. And, we got to watch our team win the national championship. More priceless.

I can see how business travel could be more lucrative for a person who lives alone. Then for the time on the road, you could eliminate some expense categories altogether!

Did I forget anything?

2020 Goals

January 7th, 2020 at 11:07 pm

I don’t know why but I didn’t feel as eager as I usually do to draft my goals this year. But I know how powerful it is to have them so I am doing it now.

(1) Get EF back to 3 months’ basic expenses
(2) Adopt a permanent health-enhancing habit each month
(3) Renew my professional certification by the September due date
(4) Pay no CC interest or fees
(5) Spend time with each kid to encourage his current area of growth
(6) Complete identified home maintenance

It will be a big year for us – two graduations! (fingers crossed)

(4) sounds easy, but I have a balance on a 0% card that expires this year. So it’ll need to be paid off and/or transferred to another 0% card with no fee involved

(5) Areas of focus:
DS1 – career planning
DS2 – housing of his own
DS3 – college transition
DS4 – Scout rank advancement
DS5 – Confidence, schoolwork

(6) Next maintenance:
Replace half-bath light/fan
Pressure-wash house
Painting: living room, family room, & downstairs ceilings

RIP Ally Cashback Credit Card

January 6th, 2020 at 09:57 pm

For a year or so I've carried an Ally cashback CC. It had a $100 bonus for spending $500 when I got it but best of all the cashback rewards could be deposited directly in my Ally online savings account (in amounts of $25 or more) with a 10% bonus on those rewards added. It was a good arrangement for me - the rewards were free, the bonus on the rewards was free, and then it earned interest once it hit my savings account. Win-win-win.

Well, nothing good last forever does it? Now TD Bank has informed me that the Ally cards will be discontinued and replaced with a card of their own with more standard rewards. The last day to redeem Ally rewards is February 13th.

Today I redeemed all but $25 of the rewards (since that's the minimum to redeem). I'll stop using the card at the end of the month and then redeem the rest. I don't know if I'll even take the new card - I have others with similar reward structures.

It was nice while it lasted.


January 5th, 2020 at 11:45 pm

Now that I have a blog of my own, I can do this. I'm worried about Nhgirl1970 (one of the Lauras). Does anyone know her in real life? She last shared that she was going through a health crisis and I've had her on my mind since then. I hope she's okay.

Family & Values

January 5th, 2020 at 10:34 pm

I figure that it’s probably good to give an overview of our family situation and my values so you can understand why I spend on the things I do. And also hold me accountable when my spending patterns do not appear to support my stated priorities.

DH and I married young but didn’t have kids until later. For most of our marriage I have been the primary breadwinner, and since 2007 when he suffered brain damage from a bicycle accident, I have been the only breadwinner. It’s been interesting to read MM’s blog because her situation has some similarities. We have 5 boys ranging in age from 16 to almost-25.

I plan to retire the year I turn 60. Much of my financial strategizing is done with that in mind, but there are things that I will spend on even when it takes me further from that overall goal:
++ Family, especially preparing the boys for their adulthood
++ Health, mostly preventive things that are not medical services
++ Home environment, because it has such an impact on my mood and outlook

I’m probably forgetting something, but those are the biggees.

Kick-off Introduction

January 4th, 2020 at 09:51 pm

First-time blogger, but frequent commenter! I feel like I know many of you already.

After a few suggestions by CCF, I'm starting this blog to share and to capture my activities.

Hopefully I've set this up properly. After numerous attempts to change the blog settings, I gave up. The changes just don't 'take' when I update. I'm not sure what I'm doing wrong but perhaps I'll correct it later.

Happy new year to all!