A Reader Asks Some Financial Questions Regarding Retirement

My Financial Meeting Post, which is located HERE brought this comment from "Jenn in Indiana" that I'd like to discuss as it might explain our current position a bit better and it might help others struggling in some way with retirement planning.

Jenn said......
"I feel so behind for retirement.  How did you and your husband know where to even start when saving/investing? I would like to go to a planner but my husband has no trust in them. Maybe you could write some blog posts on how you made retirement so successful? And how do you pay for such expensive insurance since you don't yet get Medicare? You seem very knowledgeable and would love some advice?
J"

Let me put out there that I am no way a financial expert nor do I pretend to be one.  My Hubs did spend 33+ years in the insurance business(not sales though)and the last 20+ of those in retirement services specifically.

And again, everyone's financial journey is different so take any advice with a grain of salt and mine is worth about what you paid for it(which is nothing). ;-)
***********************

Let's take this part by part......

"How did you and your husband know where to even start when saving/investing?"

It took years to get traction financially.  When we first married it was "keep your head above water time".  We were young, a year out of school(Hubs was still in a graduate program)with no 'real' jobs yet.  Getting Hubs established in his career took awhile and we relocated twice(2 different states)before he was offered a living wage.  We lived with family in 2 different states then rented half of a 2 family house from a family member before things got to a point financially when we could breathe.

As soon as Hubs began his corporate job in 1984(where he would work various jobs his entire career of 33 years there)we took advantage of ALL the employee programs to save--we bought US Savings Bonds, we contributed to the company 401K and received a 3% match(free money! always take that at the very least!!), and he got credits into a company pension plan once he was vested.  We always had everything taken out before we got his paycheck so we didn't see that money and never expected to spend it, living off what was left.
And when Hubs got raises and bonuses we never inflated our lifestyle to use up all that "extra" income.  We sat down and planned out if/when we wanted/needed to spend any of those windfalls but mostly we put them toward a goal(buying a house, college, etc.)or threw them into savings and didn't plan on touching them.
The only time you EVER touch retirement monies is in a severe financial emergency(if even then).  99% of emergencies don't meet this criteria IMHO and the penalties just make it an even worse idea.  We did withdraw a small portion from our 401K early on to buy our first house(one of the few exceptions they allow a withdrawal before 59.5 years old) but repaid it within a few years so it didn't set us back much.  If we had to do it all over again, we might not have taken that option.

The take away here is to ALWAYS put money into something your employer offers-401K, HSA, MSA, Savings Bonds, IRAs, etc. And read up on what each thing your employer offers is before paying into any of them!
And don't look at windfalls as "time to have a good time" money.  Put it to work for you for retirement.  The earlier you start socking money away for your old age the better but it's never too late to start!

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"I would like to go to a planner but my husband has no trust in them."

There are two kinds of financial planners--
The first kind are the ones who want to sell you their financial instruments.  They make a commission off of you so unless you want to be pressured into buying financial products or truly go to them planning/wanting to buy what they offer, and you aren't financially savvy, don't use one of these.
The other kind of planner is a Fee-Only Financial Planner.  This is someone you will pay by the hour or session to go over your finances and offer their best advise on what actions you need to take to grow your money.  They are a true fiduciary--someone is is ethically bound to look out for your best interests.  True that a financial planner who is working on commission to SELL you stuff is capable and suppose to be a fiduciary but seriously, given the choice of a planner who you pay for their advise vs. a planner who is also trying to sell you a financial product he has a vested interest in.....who do you think is more likely to have your best interests at heart?(Not to say that some sales planners aren't fiduciary but why take that chance if you aren't schooled in finances?).  Pay a planner to for his/her advise.  They won't pressure you into buying an investment since they make no money off selling such.
I've got a funny story(well not funny ha-ha)about meeting with a "financial planner" from our then current bank, a "free" meeting since we were that bank's customers.  His advise to us was to stop trying to pay off our mortgage early and to throw that extra cash into some financial investment his bank/he made a commission off of.  Well of course he wanted all that extra interest we paid them on our mortgage loan to continue to flow in plus the added bonus of a commission to get us to invest in one of their financial investment products.  He actually tried to tell me that paying off your house early was a bad "investment".   Yeah, a bad investment for HIM! lolz

I'd go HERE and find a Fee-Only Financial Planner in your area or use a similar site for licensed, reputable advisers.  Make sure you know up front what the planner charges and for goodness sake find out what documents you need to take and have it all organized.  This will mean your appointment will go smoothly and your hourly rate will be less if you aren't having to rifle through files and having to make subsequent appointments.  And it's learned advise but you are free to adhere to it or disregard it but if you aren't financially literate it's a GOOD thing to go get!  That few hundred $$s you spend on a planner may well be worth it's weight in gold.

********************
"Maybe you could write some blog posts on how you made retirement so successful? "

I plan on going in depth in a post on how our journey-from college to retirement-has played out in the near future.  It might help explain how we got to this financial point.
It would be too long for this post but look for it in the coming months(I've already begun work on it.). ;-)

********************** "And how do you pay for such expensive insurance since you don't yet get Medicare?

Ok, Hubs company(Prudential)offered a medical retiree plan for many years.  It was free and one of the perks of being a vested, "I don't know how many years exactly", employee retiree.  But about 10 years or so ago Pru changed things up.  They did away with the free retiree medical until Medicare plan.  Everyone who retires gets credits into a RMSA account(RMSA=Retiree Medical Savings Account)depending on years of service at retirement and your pay level/etc.).  Hubs was due to get approx. $60K in RMAS as of 2017.  But once we began the process we learned that since he was married Pru added another 50% of credits into the account for the spouse so our RMSA account at his retirement date was $90K+.   This was a surprise and make the decision to retire when he did highly doable and I  wouldn't be kept up at nights worrying about that cost. This money is not an HSA and can only be used to pay for health insurance premiums.

Prudential's thought was this RMSA would be enough to bridge any early retiree until age 65 to pay for private health insurance.  Unfortunately with the escalating cost of premiums it won't be enough to get us both to age 65 without having to use a bit of our savings.
Once it runs out(about 9 months before Hubs hits Medicare)we'll be eligible for the ACA exchanges(if those are still around then or whatever takes their place).  But for now the RMSA means we make too much money as it counts as income for ACA purposes.
So medical care is still a big unknown once the RMSA runs out but we've got lots of cash saved and we'll come up with a plan once we come to that bridge.

******************
The only other advise I'd offer up here is to go find this book at your local library.......
"The 5 Years Before You Retire: Retirement Planning When You Need It the Most" by Emily Guy Birken.

I've found it so useful that I've given a couple copies of this book away on the blog as I find them cheaply.

Some specific figures may be out of date as my copy was written in 2014 and I don't know if there is an updated edition of that book.
It's a handy little book and will help you see what you need to do/where you need to adjust/where you are doing well heading into retirement.  I'd say it would be better to get a hold of it 10 years before you plan to retire rather than 5 but that's just MHO. ;-)

If anyone wants to add any advise for Jenn, or ask a question, feel free to leave a comment.  

Sluggy

Net Worth.....April 1st Update

We are up almost $29k from the March 1st net worth overall(only liquid cash/investments/bonds, as I don't count housing or car values).  The retirement accounts were up almost $6K for April 1st 2017 from the March 1st 2017 calculations and the cash reserve/non-retirement accounts were up almost $23K.
Most of that cash reserve/non-retirement accounts earnings was Hubs' 2016 work bonus check(plus what I squirreled away into savings from the regular paycheck).

We are up $93,862.55 from one year ago, from the April 1st of 2016's net worth snapshot.  I am glad to see that interest rates have inched up something like a quarter of a percent. Whoopie! lolz
I know those of you paying off debt dread interest rates going up but those of us trying to grow our savings and are too close to retirement age(or retired)to risk a lot of it in the stock market so we hunger for interest rates to climb.  They have been artificially depressed for soooo many years by those in charge and our federal government that it's almost impossible for regular people who are saving to get ahead of the inflation rate.  This is a travesty!
But I digress.....

We are still in acquisition mode and Hubs still has a good income.  We continue to live well below our means and sock away as much cash as we can for retirement.  Luckily in March we didn't have any big money emergencies as I try to be proactive in looking ahead for problems to avoid them.

Life happens and is expensive so save as much as you can for those rainy days no matter your age or how close/far away you are from retirement.

Did you increase your net worth last month?
Do you have a retirement plan in place?

Sluggy

Please Start Saving for Retirement Now

I read a statistic from the US Government Accountability Office that says that about 50% of those age 65 or older, who are retired, rely mainly on Social Security benefits to survive.

Social Security is only designed to replace about 40% of our pre-retirement income(for average wage earners).  Go HERE to read this.  It is an actual quote from the Social Security Adminstration.  (You can also access a Retirement Estimator from that page to see what your Social Security Benefits would look like using current information.)

Social Security is only a part of the proverbial 3-legged stool of retirement.
Pensions(or Defined Benefits Plan or 401Ks)are another part, and savings and investments are the last part of that 3 sided retirement income instrument.

Even if you have yet to put anything away into a retirement account it is never too late to start, no matter your age.  The younger you are when you start saving the better, but even into your 60's there is time to put away something so that you aren't living in a cardboard box or raiding dumpster for dinner when you get old.

The average Social Security check last year was $1,340 a month or $16,080 a year.
But that amount is before Medicare benefit payments are deducted(which you are enrolled in at age 65). At the very least Medicare Part B premiums are $104.90 a month and Part C and/or D plans add to that cost(depending on the plan).  So the average check is now down to $1,235.10 and probably lower due to paying for supplemental Part C/D plans.
Could you live on $1,235.10 a month/$14,821.20 a year?

The answer is probably no for most of us without having to forego many everyday luxuries we are use to, like a car, a nice place to live, eating 3 healthy meals a day, having heat, etc.

Even living in the paid for house I do, once I deduct the taxes, sewage and garbage fees, if I only had this average Social Security check coming in I'd be down to having $10,002.72 to live off of per year.

The car costs, utilities, water and phone costs would take another $6,868.71 out and leave $3,134.00 of that check to cover all food and toiletry costs for the year.  Plus if we needed dental or vision care(which aren't included in Medicare)or a surprise car repair/replacement that would also have to come out of that $3K leftover for food/toiletries.   Seeing as I spent over $4K last year on food/toiletries, and I keep a very tight food budget compared to the average American consumer, we'd be over budget and in the red and having to put expenses on credit cards(which we wouldn't be able to pay off ever).
Forget about traveling, eating out, entertainment that wasn't free or giving our children gifts or donating to charity.  It just wouldn't fit into this budget.
Thankfully for us, we won't have to live on that average Social Security benefits check alone, as we have saved for many years for our retirement.

Please no matter your age start saving something for retirement now.  I beg you!
Even if you think you'll work until you die so you don't think you have to save.  Life never works out the way you want it to/think it will.  Working until you drop dead is a great plan unless of course you get sick and can't work.  And at some point in this journey called life we will all get sick and it might incapacitate you well before you plan on not working and force you to stop earning an income.  You could be disabled for many years before you leave this Earth and then what happens when you try to survive on a Social Security and/or Disability check that just isn't enough?

Anything you can put away for your tomorrow is a bonus.  Do you really "need" that coffee beverage before work or that third cocktail at Happy Hour?  Do you need to buy yet another sweater or go out to lunch instead of brown bagging it to work?
Take that $2, $4, $8 or $20 instead and start tucking it away into a savings account.
Score a savings at the grocery store?  Why not take that amount you "saved" and actually put it into the bank and once you have enough roll that account into an investment instrument?

Be good to yourself by looking out for your tomorrows.
Start saving for your "tomorrow you".
One day your "tomorrow you" will thank you.

Sluggy

April 1st Net Worth Snapshot

We are up $6,800.14 from last month's net worth overall(only liquid cash/investments, as I don't count housing or car values).
However, in just the non-retirement accounts(savings, cash on hand, bonds, etc.)we are DOWN $3,695.68.  This is due to paying for the renovation project we had done in Feb./March from these monies.
Oh well.....you win some, you lose some, and I am ok with this trade-off....less cash, better and functional surroundings.  '-)

We are up $104,375.25 however from one year ago, the April 1st of 2015 net worth snapshot.  This is due to the retirement account earnings and additions.
So things are still ok with me here as overall we are trending further ahead than we were a year ago.

Once Hubs retires I will miss these little monthly look backs, when we move from acquisition mode with money to spend-down mode. ;-)

Sluggy

2016 $38K Savings Challenge.....March Update

Every year I keep a close eye on our monthly expenses and our monthly income.

Our income is mainly the salary my Hubs draws from his job.  We have money taken off each paycheck from the top to put into savings, before we even get our hands on it.  This money that's taken goes into various pots....life insurance, health insurance premiums, long term care insurance premiums, investments and retirement savings.  It's automatic so we are never tempted to NOT put it into savings or these other categories.

Once the automatic savings amounts, plus taxes and medical/dental/vision premiums are taken out, it leaves what we get to "live on".  From this amount we budget for bills, both monthly and irregular bills(semi-annual, annual etc.) and our variable bills(like food, eating out, clothing  etc.)  Anything left over once our monthly expenses are paid, I put aside into an interest bearing Savings Challenge account.

For 2016 I am continuing my Yearly Savings Challenge.  I am raising the Goal amount to $38,000 this year, $10K more than my goal for last year.

I have reconsidered and changed my Goal from $40K to $38K for 2016.  With some things coming down the pike this year I thought it prudent to back up my Goal a couple of thousand.  8-)

On to the March report.....

I have posted my March End of Month $38K $AVING$ CHALLENGE Totals.
Check out the Savings Challenge page tab at the top of the blog for the specific numbers HERE.

I have 2 goals each month.....
The 1st is to actually finish each month in the black and not the red.
The 2nd is to hit the targeted savings amount of $3,166.66.

I have to report that we finished up March with a large amount leftover exceeding my target amount.
The extra amount we ended the month of March with?.......$4947.49

Income

We had $2,803.42 left over from our income after our monthly expenses were deducted.

Other monies received in March totaled $2389.61.  This included interest made on non-retirement accounts, a tax refund and 2 stock dividends.

This brought us to our gain of $4947.49
Since we have no debt, this goes into savings.

Outgo

As for the expenses this March, here are the good and the bad side of things....

HERE are the GOOD THINGS

*  Phone charges, water bill, and internet were approximately the same as last month.
*  The March electric bill was actually down $63.66 from February's bill.  With electric heat this is an amazing total for heat and lights, etc. in northern, mountainous PA. February and March are generally our highest electric bill months in the year.  I will be glad to see the electric start to slowing decrease even more for the next 7 months.
*  The credit card bill was down $474.99 from last month.  No travel and little shopping=not much spending on that card, other than gas purchases.
*  The gas card bill was down $46.67 as Hubs put more gas purchases on the Mastercard.
*  We received a tax refund this month.
*  The monthly medical bills were down $1,150.29 from February's total.  Yep, we paid off all those high deductibles now for the year.
rah.
go
me.

HERE are the BAD THINGS

*  Of course we had Real Estate taxes due in March and a sewage bill to offset all that medical bill we didn't have this month.
It's always something, isn't it? 8-(

The Food Budget costs for March are in another post, which is located HERE.

March was a pretty expensive month for us.  The regular bills were very low this month coming in at under $1800, but we had taxes and a yearly sewer bill to offset that.  Still we were able to save quite a bit even with those expenses.

With 3 month accounted for, our Savings Challenge Grand Total for 2016 is $9414.82.

Final thoughts on March---
I am happy with what we socked away in March given the irregular expenses.
And compared to March 2015 we put $1150.37 more into savings this March
.
We have $9K+ saved so far in 2016, and we are only $8.185 behind at this point in the year.
We will be catching up for sure with the financial goals in April when the first 3 paycheck month of the year rolls around.
Yay 3 paycheck months!

THOUGHTS going forward into April----

I happily await April, the first tree paycheck of the year month for us. In addition I should receive a check for blogging in April which is a happy extra.  8-)

We do have a big car insurance bill due in April(under $1K though)but even so we will be able to catch-up(and even get a bit ahead)with where we should be with our savings goal for the year in this month.
May and June we have no irregular large bills so we should gain traction if we can keep the credit card bill under control.  I can do that IF we don't travel and we are suppose to travel in May so the bills will roll in from travel in the May and June c/c statements. sigh.

Again, it's so hard to save when you want to "live" life too because that means spending something.  ;-)

So how was your March financially?
  

Did you spend less than the income you had in March?
Did you stay within your budget or not?
What did you do with any money leftover at the end of the month?
Did you pay off any debts or put extra toward your mortgage principle or into savings, in an emergency fund or a retirement account?
Or did you blow it on a want?

If you posted your financial progress on your own blog, leave a link in the comments so we can go check out your progress too and celebrate or commiserate with you!

As we go forward into 2016 why not make this new year the one were you clean up your finances and pay off your debts.
Plan to set something aside if you don't already now or increase what you bank now for your future self.
Live below your means and keep some change for a rainy day....because no matter how sunny it is in your life now, dark clouds come along and you'll be glad you have that umbrella to keep you dry.

Sluggy

$28K Savings Challenge......April Update

Every year I keep a close eye on our monthly expenses and our monthly income.

Our income is mainly the salary my Hubs draws from his job.  We have money taken off each paycheck from the top to put into savings, before we even get our hands on it.  This money that's taken goes into various pots....life insurance, health insurance premiums, long term care insurance premiums, investments and retirement savings.  It's automatic so we are never tempted to NOT put it into savings or these other categories.

Once the automatic savings amounts, plus taxes and medical/dental/vision premiums are taken out, it leaves what we get to "live on".  From this amount we budget for bills, both monthly and irregular bills(semi-annual, annual etc.) and our variable bills(like food, eating out, clothing  etc.)  Anything left over once our monthly expenses are paid, I put aside into an interest bearing Savings Challenge account. 

For 2015 I am continuing my Yearly Savings Challenge.  I am raising the Goal amount slightly to $28,000 this year, $4K more than my goal for last year.

On to the April report.....

I have posted my April End of Month $28K $AVING$ CHALLENGE Totals.
Check out the Savings Challenge page tab at the top of the blog for the specific numbers HERE.

I have 2 goals each month.....
The 1st is to actually finish each month in the black and not the red.
The 2nd is to hit the targeted savings amount of $2,333.33.

I have to report that we finished up April with a HUGE amount of leftover cash.
The extra amount we ended the month of April with?.......$6,343.83

Income

We had $6,207.11 left over from our income after our monthly expenses were deducted.
 

Other monies received in April totaled $136.72.  This included interest made on non-retirement accounts.

This brought us to our gain of $6343.83
Since we have no debt, this goes into savings.

Outgo

As for the expenses this April, here are the good and the bad side of things....

HERE are the GOOD THINGS

 

*  Phone charges, internet and  were approximately the same as last month.
*  Electric bill went down $150.88 from March's bill because of a decrease in heating.
*  Cash withdrawals went down by $230.48
 

HERE are the BAD THINGS
.
*  Water bill was up $12.37 from March's bill.  Don't know why.
*  We had 1 irregular bill from a dental visit.
*  Gas card bill went up $100.12 from March's bill.  2 round trips worth of gasoline to College Boy's school and Hubs putting most of his gas spending on this c/c rather than our other c/c.

*  The credit card bill was up $886.86 from March's statement.  Almost $800 of this increase was for prepaid hotel charges for our May trip.  While I didn't like seeing that big c/c bill it's nice to know that once we get home from our trip a sizeable chunk of vacation charges will already be paid. ;-)
 

The Food Budget costs for April are in another post, which is located HERE.  I actually came in under budget on food/toiletries for April.....well, $1.41 over. ;-)
 

The 2015 TOTAL.....
With 4 months accounted for, our Savings Challenge Grand Total for 2015 is $15,039.21.
That averages $3,759.80+ a month so far and is about $1,426.47 more than we need to put away every month to reach the $28K goal for the year.

THOUGHTS going forward into May----

Irregular bills coming in May......semi-annual car insurance bill comes due for our 2 main cars.  This comes to about $1500 a year now.  The bill for the spare car(for College Boy to use while home)comes due in August so we won't worry about that one now.
I am figuring our "nut" this month will be about $2,500 unless we purchase a freezer in the next week which increases our credit card bill for May.


With 4 months behind us we have $15039.21 down and $12,960.79 left to save in 20015.  That means we are over HALWAY to our yearly goal.  The amount left to save breaks down into $1,620.10 per month for the next 8 months of the year. I think we can easily do this number each month.
 

 

So how was your April financially?
  

Did you spend less than the income you had in April?
Did you stay within your budget or not?
What did you do with any money leftover at the end of the month?
Did you pay off any debts or put extra toward your mortgage principle or into savings in an emergency fund or a retirement account?
Or did you blow it on something you wanted?
 

If you posted your financial progress on your own blog, leave a link in the comments so we can go check out your progress too and celebrate with you or commiserate with you!

Sluggy

Crunching Numbers.....Part Two

Here are my spending categories,  side by side, first 2013 expenses, then 2014 expenses, and my thoughts---


Dental bills                  $1071.00
Dental bills                      $88.20  Spending DOWN $982.80

* Dental--This was what we paid for dental services after our insurance was charged.  It was a low spend on dental in 2014 just cleanings. Lots of crown and filling work done in 2013.  I can't count on a spending total like 2014's in 2015, but I can hope our teeth stay in good shape.  8-)

Eye care                         $172.05
Eye care                         $135.00  Spending DOWN $37.05

* Eye care-We have a "Cadillac Eye Plan".  We all have yearly eye exams and usually get a new pair of glasses each year.  Evidently we selected slightly cheaper frames in 2014.

Long Distance phone     $91.30
Long Distance phone     $87.16  Spending DOWN $4.14

Landline phone           $284.58
Landline phone           $292.19   Spending UP $7.61

Cell phones                   $214.12
Cell phones                   $216.39  Spending UP $2.27

Phone spending UP overall by $5.74

** Phone charges--We have a landline still and pay about $7-$8 additional each month to be able to make long distance or receive long distance calls on it, so the first 2 items are combined for our non-cell phone service. 
In 2013 we had 3 phones(my Pay-As-You Go, hubs PAYG, and hub's business phone).  In 2014 I took over hubs PAYG phone and ditched my PAYG phone and hubs uses his business phone only.  As you can see, we don't use the PAYGs much.
When Hubs does retire and loses his free cell then we'll come up with a new plan for the phone situation.

Home Maintenance  $19452.51
Home Maintenance    $2767.76  Spending DOWN $16,684.75

**Home Maintenance--In 2013 we did major spending on home repair/improvements.  2014, not so much besides having the driveway redone.  The biggest chunk in 2013 was having a new heating/AC system put in.  Then there was the new bamboo flooring, crown molding and interior wall/ceiling repairs in the living/dining room and work on the exterior.

Garbage                       $336.00
Garbage                       $336.00   No change in spending

Sewage                         $407.40
Sewage                         $407.40  No change in spending

*  Garbage and Sewage--These are NOT included in our municipal taxes but I pay each in full at the beginning of the year(since I have the full amounts at the ready)and get a small % discount over stringing the payments out over the year.  Luckily these charges haven't risen the last 2 years.  There is nothing I can do to change/lower these two.....except maybe move. lolz

Water                           $780.52
Water                           $610.93   Spending DOWN $169.59

*  Water--Usage averages about $50 per month, except is a bit higher when College Boy is home.  Some of the usage in 2013 was due to having the pool.  No more pool and College Boy at school and the water bill is less.

Insurance Home          $612.00
Insurance Home          $634.00   Spending UP $22.00

*  Homeowner's Insurance--It's a good price for the area plus we get discounts for being longtime customers and having our cars insured through the same carrier.  It tends to go up about $20 a year.

Cable/Internet            $1293.84
Cable/Internet            $1269.66   Spending DOWN $24.18

*  Cable/Internet--We ditched cable in Sept. of 2014 otherwise this bill would be more for 2014 than 2013.  I got tired of paying $70+ a month for the privilege of watching the garbage which is on television.  We got a $40 indoor antenna and now get 10 channels from local stations.  We are considering more changes to our internet but are fairly happy with things the way they now stand.
2015, if we stay with internet only the bill will be $479.40, a Savings of $790.26 over 2014.

Car Maintenance       $1726.53
Car Maintenance       $1563.21  Spending DOWN $163.32

*  Car Maintenance--This includes all repair bills, parts bought, maintenance oil changes, etc. and PA state fees, inspections, driver's license renewals we paid for each year.  Getting rid of 2 cars late in 2014, buying a new car(so now only 1 old car instead of 3 old cars)we figure these charges will go down a little in 2015.  My first 2 years of maintenance services are free for the Sonic and we don't need to renew licenses in 2015.

Insurance Cars          $3080.17
Insurance Cars          $1890.51  Spending DOWN $1,189.66

*  Car Insurance--It was crazy last year keeping track of car insurance since at any given time we owned 2-5 cars.  We are down to 3 cars(one is oldest son's and he pays the insurance on that even though he is still on our plan), so we will pay $1711.72 for our 2 cars in 2015.  There may still be changes in the car situation-hubs is considering buying a new to us vehicle and College Boy will be needing a car for his last year of university(internships were he has to travel).  But for now there are no changes planned for 2015.

Electric                       $2437.36
Electric                       $2890.02   Spending UP $452.66

*  Electric bills--In 2014, $2134.31 of that bill was actual energy usage, $755.71 was transmission charges and basic fees everyone has to pay no matter their usage.  I don't have a breakdown of actual energy usage/transmission charges for 2013.
We used 24,381 KW Hours in 2014.   We used 26,235 KW Hours in 2013 so obviously fees and actual energy costs went up in 2014.
The cost of electricity varied between 2.16100000¢ and 2.04542300¢ in 2014.
The cost of electricity at the end of 2013 was only 1.98300000¢.

We cook and heat with electric plus all the other things you run off the energy grid. It sounds high but every month when we check what we are spending on electricity compared to comparable sized houses in our area, we are always at the very bottom of the scale.
I can account for some of the increase in the cost of energy rising in 2014 and we didn't have A/C in the Summer of 2013 but did in 2014.(New system was installed in the Fall of 2013.)

Local Taxes                $3148.24
Local Taxes                $3272.12  Spending UP $123.88

*  Local taxes--These include the municipal and school taxes.  This doesn't include state taxes or another local tax we are charged each year(which comes out of the paychecks before we get the money).  Can't really do anything here to save money besides paying it up front(small discount for paying that way)and applying for and receiving a Homestead Rebate(which was done)....except move. ;-)

Gasoline                      $3197.15
Gasoline                      $4393.81  Spending UP $1,196.66

*  Gasoline/Fuel Charges--Granted there was a LOT of travel for pleasure last year and not just fuel expenses to get Hubs to and from his job and me to run errands, so a good portion of the gasoline bills were not "necessary" and if pushed we can choose not to incur them.  

Gas bought for trips in 2013 came to $551.33, so the "necessary" gas we bought in 2013 came to $2,645.82. 
Gas bought for trips in 2014 came to $898.87, so the "necessary" gas we bought in 2014 came to $3,849.02
Overall, the per gallon price for gas was more in 2014 than in 2013.

Depending on how much gas prices bounce around in 2015 & how many trips we take, we could have lower spending on this item.  Or not.....

Medical Bills  OOP    $2442.99
Medical Bills  OOP    $4652.97  Spending UP $2,209.98

*  Medical Bills--This is what we paid out of pocket but not including prescription drugs.  The 2014 figure also includes $1097.00 in medical bills for our son we agreed to help him pay for(He wasn't on our medical plan.)  In 2013 we were in an HMO.  In 2014 we had to change to a high deductible plan because our Daughter(who we covered)doesn't live within the region served by this HMO.
In 2013 we used our coverage much more(I was in the hospital for 5 days and had a few procedures that year).
No hospital stays in 2014.
Basically we pay more than we have to for comparable coverage now being on a high deductible plan for 2015.  Next year when Daughter isn't on our plan, we can go back to the HMO once we weigh the advantages/disadvantages for 2016.

Food/HBA                   $4560.82
Food/HBA                   $4989.49   Spending UP $4278.67

*  Food and Consumables Spending--I cover these in my monthly post.  It's the highest spending category for us each year but I keep my eye on it ALWAYS and compared to many others(especially in our income bracket)our spending is quite low on this line item.
Some of the increase is due to rising food costs and some of it is due to buying a bit more fresh foods than processed ones.  I still try to buy in season to keep that expense reasonable.

SUBTOTAL THESE ITEMS.............$45,271.53
SUBTOTAL THESE ITEMS.............$30,533.87  Spending DOWN $14,737.66

Non-essential categories-

Car Rentals                $392.17
Car Rentals                $895.79   Spending UP $503.62

*  In 2013 we rented a car to take on our 10 day Midwest adventure.  In 2014 we rented a car to take on our  2 week trip to Louisiana(before we bought the new car), to move College Boy into his dorm and to go visit #1 Son in Pittsburgh for 4 days.  We don't trust Hubs old car on trips anymore and my car was too small for some of those trips.

Eating Out                $2182.54
Eating Out                $1890.99   Spending DOWN $291.55

*  I felt like we ate out/got take-out less in 2014 compared to 2013 and the numbers seem to bear this out, slightly.

Lodging                     $1158.07
Lodging                     $1923.20   Spending UP $765.13

*  In 2013 we stayed in motels for 13 nights, in 2014 25 nights.  Totally non-essential except for 1 night to take College Boy for his audition to university.
Average price per night in 2013--$89.08
Average price per night in 2014--$76.93

Alcohol                      $1129.98
Alcohol                      $2284.81   Spending UP $1,154.83

*  Yikes!  What can I say?  Hubs discovered whiskey with a vengeance in 2014 and I over estimated my adult beverage consumption.  We did some traveling to states where the good stuff can be bought at a better price than in PA so we stocked up.  Add in that hubs started brewing his own beer too and it added up once you consider he needed bottles, bottle caps, sanitizer, a bottle capping device, etc.  Making your own is hardly a cheap enterprise!

In 2015 I'll be working on drinking what is here mostly so I'll be holding down the spending on my end.  Hubs however will do what Hubs will do, but I don't see it going into the two THOUSANDS in 2015.

SUBTOTAL.............$4,862.76
SUBTOTAL.............$6,994.79  Spending UP $2,132.03

Obviously we had a better time in 2014 than in 2013 since we spent more on non-essentials.

GRAND TOTAL......$50,134.29
GRAND TOTAL......$37,528.66  Spending DOWN $12,605.63

CONCLUSIONS

* Spending was down overall in 2014 from 2013's totals.   The only category with a really large difference was Home Maintenance, due to installing a new heating/ac system($12,000)plus home repairs($5793).  Most categories were within $10-$500 between the two years.
 
* Spending was down overall about the cost of the new heating/ac system in 2014 from 2013.

*  Spending increased overall in 2014 on the non-essential categories.  This is all due to "lifestyle inflation".  I'll confess it bordered on getting "out of hand".  But we had fun and made many good memories for it all. 8-)

LOOKING AHEAD into 2015--

* Spending on water and electric should decrease(as long as the rates don't rise too much)with the current arrangement of only 1 child left at home and being off at college for 7 months of the year.

* Spending on food, though a variable expense, CAN go down if A-child doesn't eat home much when he is home, and B-I keep a better eye on the price/amount of food I buy.

* Internet will only be $479.40 in 2015(as long as they don't jack up the rate before the year is out).  Ditching cable will save us $840+/- in 2015, or $560 less than we spent in 2014 on the cable/internet category.

* It's clear from the figures that we need to revisit the phone arrangement/spending.  Cell phone spending will be $216.39 in 2015.(Unless I use all my minutes up and need to buy more.)  The only reason we keep the long distance component on our landline is so when someone calls us long distance we don't pay-incoming ld is free, outgoing ld is charged at .25¢/minute.  If we drop the ld component it would save approx. $87 a year on the landline.  But then we'd have to use up cell minutes on incoming ld calls.
If we drop our landline(savings of $295+/-a year) I'd have to upgrade to a cell plan which would increase that component of the spending.  The question is-would spending on phone increase overall or go down if we make that switch?  This requires more discussion to decide.

* Take out the heating/ac system bought in  2013 and we spent approximately the same in 2014 as in 2013.  The amounts per category shifted but the total yearly spending was about the same.
For 2015 I'll try to do better in the variable categories.  Here are the categories I can potentially impact---

* Electricity-use less, shop for better rate
* Water-use less
* Food/HBA-spend less/find better deals
* Non-essential categories-spend less on all these
* Gas-lower prices, use less
* Phone-find a cheaper solution/drop services
* Home/Car Insurance-shop for a better rate

Is everyone thoroughly tired of hearing about my spending?!  ;-)

Now tell me, do you ever analyze your yearly spending? 
When you did were there any categories of spending/amounts that you were surprised at?
If you have tired, how have you lowered your yearly spending on specific categories and did it make a large impact?

Sluggy



 

Net Worth March 1st

Thanks in large part to Hub's bonus, our net worth increased $31,479.11 from February 1st. 
Of course this accounts for a decrease of $1,735.18 from January 1st to February 1st(temporary setback), so really it's an $29,743.93 increase since January 1st.

We don't include the college funds or the value of our home in our net worth calculations, mainly because the college monies aren't going to be spent on our retirement and the home is not a liquid asset since we have to have somewhere to live.

Retirement funds are up $8759.72 since January 1st as well.  Not increasing very much since we moved them out of  riskier/volatile funds, as we are too close to retirement to chance losing money.
Otherwise we'd be seeing better gains here.

With only a few years until retirement we are closing in on the 1 million $ mark proving once again, it pays to not spend all your money on the here and now.
Plus it pays to have a really healthy income as well and a wife who sees value in saving money whenever/wherever possible, even when spending on "life". ;-)

So don't forget to FEED YOUR PIG each and every month.
Don't let her/him waste away from financial malnutrition.

For help and guidance on how to save, check this site out HERE.

 

Sluggy

Don't Look Behind You.....It's Retirement Sneaking UP!

Last year, when I began researching the cost/probability of replacing our heating system with a geothermal system, I realized that it made little sense to spend the money to do this since we wouldn't be living here long enough to recoup the expense of said system.


Yes, it was at that moment that I realized that we only have to live in this school district, as of now, for 3 more years!
And going further, I realized that we only have to live in this area near Hubs job for another 7 years because Hubs has decided that he wants to retire early at 60.

All I can keep thinking is, "How did being near retirement age sneak up on me"!?!?

One day I am dealing with a Husband, 3 kids, 4 dogs and life as a suburban Homemaker and I turn around and I'm 52 years old with only 1 kid left at home fulltime, 2 dogs and a husband who is planning on retiring in 7 years.
Wow!

Other than throwing money into retirement/investment accounts before I get the Hubs paycheck every other week(for the last umpteen years), and glancing at the statements that come in the mail quarterly, we haven't sat down and actually crushed any numbers or figured out how much we will have or need to live in retirement.

Hubs use to tell me offhandedly that he wanted to retire at 55.  He comes at that age due to his father, who was a laborer, who worked until he became physically disabled in his 50s.  He was forced to retire in ill health/pain and never got to enjoy his old age fully.
Hubs wants to leave the rat race while he still has his health and wits about him.
And I so get that.

But I didn't pay him much heed when he started spouting off about retiring, because well, geez, 55 is a long way off, right?
But it's here now, knocking on the door and I am not wanting to open that door and let Mr. 55 in!

Then after the last few years of Recession/Foreclosures/Bank Bailouts/Stock Market Dives, Hubs stopped throwing around that 55 number.....especially after our investments took a nose dive in 2008/2009.
Last year he started making noises about retiring at 60 instead.  He said he ran some numbers and with the hit we took in our savings(even with the rebounds lately), he feels secure about making age 60 his new retirement number.

Besides figuring out the savings balance, I am more comfortable with 60 than I was with 55.  Mainly because at 55 we would still have a child in high school and one in college.  So the kids would still be dependent on us for financial support.  Kids + No income=Bad Planning  8-(

So I want to ask all of you dear readers.....
1.  How many years from now do you or does your significant other(if that applies)plan on retiring?   Is it a 'historically normal' retirement age or do you plan to retire early?  Or is retirement going to happen the day you can no longer physically work or drop dead?

2.  And when you retire, do you mean stop working fully?.....Or getting different job--one that is parttime and/or pays less but keeps you active?....or a job that you love?

3.  Besides Social Security benefits, are you putting any money away for your retirement?

4.  If you were to retire, in today's dollars equivalent, how much money do you think you would need to live on for 1 year? (Don't include the cost for major medical care(other than prescription meds and normal preventative care)in this, just the amount you would need to cover your normal living expenses in retirement with no one to support other than yourself and your spouse, if you will have one.)

5.  If you will have savings/cash to live off of in retirement other than SS, do you think you will have enough to support yourself until you die(given no catastrophic medical bills that would bankrupt you)?
How many years do you think you will live until your savings run out?

6.  Where will you 'park' your savings?  Invest it?  Bank it?  CD it?  Bury it in the backyard?  An Annuity?  Do you have a Pension?

Yeah, I know this post is pretty much a downer with all this death and running out of money talk?lol
But I am very curious to see how other people are planning for retirement and what they think about entering this stage of their lives.

Sluggy