Tag Archives: social security

Week 75: 555 More Days, and Refi Update

Monday, 22 January 2018

The flu took a lot out of our lives.  I didn’t get it, but Mr. 182 did.  He was miserable, and I have never seen him so ill in the 25 years of our lives together.  He is still coughing badly, but other than that he is doing fine.  Because he was so sick, we didn’t address what we felt to be issues in this refinance of our house, but last Friday morning I was off work and he was well enough to discuss the details.  The final decision is to proceed with the refi, fixed for 30 years at 4.25%.  There is no prepayment penalty, so once things are done with other financial issues, we will decide where our priorities lie.

Yesterday, I really thought through my retirement date.  Based on what information I have about the school district, I decided I won’t retire until August 1, 2019.  There are 555 days left!   Setting a date was based on a number of reasons.  As a teacher, I like working in the summer as it is extra income.  There is also a potential golden handshake, if not this year, then in the next fiscal year.  I will begin to pull my social security in November 2018, with a 25% deduction (or more) for tax purposes.

With the refi of the house, our proposed house payment will be about $1100 less than what we currently pay.  That will put us ahead on debt reduction.  When I take social security, I will be older than 66.  This allows me to work without income limitations, and will add about $1200-$1400 to our monthly income after the tax deduction.  The extra money should, in theory, pay off all credit cards, increase savings, and put a better financial cushion behind us.  Once I retire, I will have my pension in addition to social security.  Our income will be lower, hopefully enough to drop our percentage even more.  Once the debts and income are squared away, Mr. 182 will increase his pre-tax deductions.

There are a lot of caveats!  As this is only the third week into the 2018 tax season, and the IRS and Congress are in upheaval with the government shutdown, who knows what the final amounts of taxes and such that will need to be paid.  Nobody really knows at this point.  Final mortgage figures are not definite, just approximate.  We hope to close by the end of February so our March house payment will be lower.  If a golden handshake comes this spring, and is worthwhile to take, I’ll do it.  I will probably take my pension, but hold off on my claiming my social security, just to make it past the 66 age marker.  Thus, while we have made our plans, life still happens, and we will have to meet the changes and adapt.

It’s a good thing to plan ahead, anticipate change, and be able to meet those changes.  Unexpected things happen.  Acknowledging their potential helps to plan for the unknown.

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Week 78: Happy New Year! And a Resolution or Two or Three

And so it is!  A lot has happened in the past year, politically especially, but in our neck of the woods some major financial changes have happened since I started this blog 104 weeks ago on New Year’s Day (or close to it, anyway).

78 more Mondays to go, and I do think I will be retired.  And mostly if not totally out of debt except for a few items.  We are not quite where I had hoped, but that is the way it is.  We are still in much better shape than we were when I started this blog, and that is saying quite a lot.

Retirement Planning

I have Medicare Part A; I went to my appointment with the manager of my retirement fund, and have sent in a formal request for what I can expect if I terminate my employment on August 12, 2019.  That will be at the end of the summer term schedule, so that makes sense to me.  Also, there are rumors of a golden handshake in the works, so if so, I will take it if I qualify.  I should get the formal request’s information back by the end of January 2018.

Social Security

I think I will start it as soon as possible, but that may vary depending on how things move along over the next several months.  I’m not sure how it will affect our tax bracket, either, but it may be worth it for a year.  We will be consulting with our CPA very closely this next year.  I am sure the poor man is already going nuts.

Debt Reduction

Like I said, we aren’t quite where we would like to be.  Taking Social Security will help clear out the debt issues sooner, and then we will be in a better place financially when I do retire.   I have re-evaluated what we have been doing, and have changed the parameters a bit.

Taxes

The Republicans claim we will benefit from their new plan.  I don’t think we will.   We live in a high tax, high housing cost state and area, so we will not be able to claim the same amounts of state and local taxes we have in the past – we claim far more than the $10,000 they are capping things at.  I’m actually worried about our 2018 taxes – I think we will owe a lot of money.  We already pay about 35% of our income in taxes, so the 2.4% we can expect in our favor in payroll is likely to go to support the corporations who won’t reinvest in their workers, only their stockholders and management, and who don’t support our government nor our citizens.  (Don’t get me started on health care, either.)  We did pay all of our 2017-2018 property taxes since we had the bills for them – this should help us a bit for 2018 filing.

Downsizing, Discarding, recycling

I think this says it all.  We have sold books, and cleaned out the garage.  Last week we created his and her sides of the garage.  While we still cannot park cars in the garage, we can access our personal stuff more easily.  We have more bookshelf space in all rooms!

Resolutions

  1. Pay off as much as possible this next 18 months
  2. Remove the 20 trees from the property so we can begin to re-do the back yard into a usable space
  3. Do the household repairs, little and big, if we can
  4. Continue to get rid of things we don’t need or use

Conclusion

This upcoming year is going to be a bit of a roller coaster ride – taxes, politics, life changes getting closer and closer.  It’s really scary, and we both need to face it and embrace it, despite our fears.  This will perhaps be one of the biggest life situations we will ever face.

Week 91: Reflections

Monday, 2 October 2017

I am getting less patient with my job and more impatient to retire.  Medicare Part A began yesterday for me.  I pretty much know what I am going to take home for my Social Security if I were to start it next year.  I am thinking . . . do I quit at the end of next year and take my pension as well, or do take my Social Security and continue to work.  Questions to be answered next year.  I still need to schedule an appointment to discuss my pension, what to expect, and the health benefit options available, or should I go on my husband’s insurance?

The big issue is really just an unknown:  what will my income be if I were to retire at the end of 2018 from pension and Social Security?  How much debt will we have paid off?

If I were to collect my Social Security and continue to work until June 2019, as originally planned, that could really bring our debt down to where I want it.  I am not really where I would like to see us – in part us, in part because of life, in part because of the payroll fiasco last June.

On January of this year, I created a spread sheet to track our progress.  I didn’t do a good job of tracking things in June and July, but when I look at our net worth, it has increased by $106,239.00 from January to the end of September.  This is from home equity, 401K, pension equity, and IRAs.

I am still unsure as to what I should do.  I know what I would like to do – just quit my job! – but that is not a viable option today or tomorrow (but soon!).  I need to collect numbers and then ponder . . . taking time for these decisions is a good thing, and knowing in advance allows me to consider many possibilities before taking the plunge.

 

 

Monday 116: Researching the Retirement Puzzle

Monday, 17 April 2017

With the idea of retirement in a couple of years, my focus is on our finances in the form of paying off bills, but it is also on preparing for the economics of retirement.  Specifically:  How much retirement income can I expect?  To get to the point where I can sit down with my retirement fund representatives, I need to take a class that is all about the requirements and benefits and so many other things.  That is on the agenda over the next several weeks.  I will do the one online rather than a group class as it fits my schedule better.

Unlike many people, I have good retirement available to me, but in my own lifetime, I have seen the benefits begin to decrease.  I have fewer benefits than people who began before me, and those coming after have even less.

It is really important to know what lies ahead in the retirement world.  How much income?  What kind of health benefits?  Medicare costs?  Time lines?  The fact is, retirement in the US is a costly and complex process, and for many, it means a drop into instant poverty.

With women still making less than men, it is especially important for women to look ahead, and to plan ahead.  I had an auntie, born in 1903, who died at 90.  She planned.  When she died, she had $500,000.00 in the bank and a ton of stock in GE, where she had worked since the 1920s.  This is a woman who did plan ahead, and she did well considering her education stopped at the end of the 8th grade.

So, that is my research over the next few months – finding out about my retirement plan, my social security, and when I need to enroll in Medicare, even if I won’t need it since I will be under Mr. 182’s insurance.

Planning ahead requires doing research, coming up with plans, and deciding what to do.  Having alternate plans is also strategically important because everything is subject to change without notice!