Has COIVD pushed you close to retirement?
6 years ago
last modified: 6 years ago
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Need advice on closing retirement account.
Comments (23)Hi again dolcemia, I am pleased that your husband has a retirement plan ... and that you have one, as well. At what age can you begin to draw on them? Usually they are set up to begin at age 65 ... can you choose to begin drawing before that? For example, in Canada, the Federal pension, to which we all contribute, which began over 40 years ago, intends to have us retire at 65, with full pension (if we made full rate of contributions ... which you don't, if you earn anything near minimum wage, meaning that low income hurts, even into retirement). If I choose to retire earlier, they won't allow me to do it before age 60, and for each 2 months that I retire before age 65, they reduce my pension by 1% ... which means 6% per year, and if I chose to retire at age 60, there would be a 30% reduction. On the other hand, if I choose not to retire until after age 65, I get a bonus of 1% for each 2 months extra that I work and contribute, 6% per year. Is your pension set up so that as inflation continues over the years, does the amount of your pension increase, as well? If there is a provision for it to increase due to inflation, it's almost certain that it won't increase at the same rate as the rate of inflation, but less ... which means that it won't cover as many expenses as the years go by as it would earlier. They call that a pension being indexed for inflation. Is your husband's pension indexed to inflation? ______________________ Do you owe money on credit cards, that you don't pay in full each month when the bill arrives? Is it/are they mainline cards, or cards issued by stores? Do you know what rate of interest that you pay on those unpaid balances? Usually on mainline cards it's about 15 - 18% annual rate. Usually on store-issued cards it's up around 25 - 28% annual rate. If I loaned you $100. and said that you owed me $25. per year for the use of it, would you consider me some kind of rascal? May I ask you a question ... have you heard the saying, "A penny saved is a penny earned"? Do you believe it? If you say that you agree, I'd like to disagree, in terms of much of the stuff that, when you buy, you might be able to save a dollar on the purchase. When you consider most of the stuff that you buy ... when you prepare your income tax, can you deduct the price of it as you calculate the amount of tax that you owe? For much of the goods that most of us buy ... the cost is not deductible. Which means that we have to buy it using money that we've already paid income tax on, i.e., after-tax money. Let's suppose that you could save $1.00 on a purchase that you make. If you're in 25% marginal tax rate (i.e. the rate of tax that you pay on your top dollar of income), that means that you have to earn $1.33 before-tax, then pay 33 cents tax, leaving yu with $1.00 in hand to go out to buy that item. So .. if you save $1.00 on the cost of the purchse ... you've saved $1.333 of extra earnings, right? Plus... if you pay that 28% on a store-issued credit card, most of the things that you bought when using it were not tax-deductible, right? Which means that, if you're in 25% income tax rate, you have to earn $36.00 pre-tax income, then pay the 25%, or $9.00 income tax, leaving you with $27.00 ... oh,oh ... not quite enough to pay that $28.00 owing. Drat!! When you buy a car (or do you lease) do you pay cash for it, or do you finance it? If finance, do you shop around to find the best rate of interest and terms? Are you a member of a credit union, or are there some in your area? Sometimes they offer lower rates, or better terms, than the usual market offers. Do you try to pay the loan off as soon as possible? I recommend that. Be sure to pay off the loan quite a while before you need to replace the car. Then keep putting away that amount of money (or nearly as much) each month, building a fund to enable you to make a far larger down payment on the next car. It would be best if you can pay the full cost in cash ... that lets you put the amount of interest into your own pocket that you'd been paying earlier to a lender. I like keeping my money in my jeans over paying others to borrow theirs. Do you have an emergency fund? That is, if you had no family income for 3 months (or, even better, 6 months ... or, better yet, a year) would you have anough money available that you would still be able to live fairly comfortably? It's important to have such an emergency fund, in case unexpected expenses crop up ... including if we get laid off from work, especially if permanently, as your husbnad is dealing with at the moment. I recommend learning how money works - it's an interesting hobby. And, know what? It pays well ... very well. As I said earlier .. pay off your store-issued credit card balances fully when they come in each month ... save yourself 35%. And that saving is ... guaranteed. Where else can you earn 35% on your money ... guaranteed!?!? Good wishes for making your money work harder for you than for the other fellers! ole joyful...See MoreWondering if anyone has done this in retirement.
Comments (49)The posts about traveling alone brought back memories of our first year/winter being campground hosts. A lady pulled in with a mini motor home(class C) and told us that she, along with her husband , had been going to Florida for many years. They were from Illinois and that year had gotten partway to Florida but she woke up one morning to find that he had passed away in the night. She stayed at a town long enough to get the necessary papers and to have him cremated, then she continued on her way. She was the sweetest lady you would want to meet. It amazed me how she was able to handle everything on the motor home . Of course, all she had to do was ask for help and everyone was there for her as they knew her so well. She came back the next year while we were there and we heard that later she was host. The Rangers were always driving through keeping an eye on things. I never forgot that lady though! :)...See MoreHas anyone gone back to work after retiring?
Comments (24)In June, it will be six years since I retired. My days are so busy that I often wish there were a few more hours in each day. I love that I have reached the stage in my life that I am finally in charge of me and no longer report to or answer to anyone else. Not having to live by the clock or calendar is something else I value highly. I do have my small (make that tiny) jewelry business which keeps my busy designing, creating and doing other things involved in running a small business. This yer i am going to spend more time on marketing. I have thought about volunteering, but currently don't have the time. That may come later. Some of my former co-workers (mostly teachers) have gone back to teaching part time and really enjoy it. Everyone is different and should do what works best for them. You have nothing to lose by giving it a try. If you don't like it, you can always go back to full time retirement. Good luck to you!!...See MoreHas a business that you liked closed due to Covid 19?
Comments (51)Alternative Reality, denialist thinking still much in evidence - and not just on this forum. On the way to the bank I had to pee so I ducked into the green grocery I like. Shoppers everywhere (as in too many to maintain adequate distance) even though they had a roped entrance with an employee sitting there, supposedly limiting and regulating the number of people in the store at any one time. After hitting the restroom thought I would grab a few items while I was there. Nope, checking the deli section I saw a tallish man leaning on the bussing station looking at his phone with his mask off his nose - this put him in a position where he was exhaling out into the main walkway through that part of the store. And so on - I soon fled without doing any shopping. Walking back to my car I saw three people standing and talking at close quarters not far from where people coming from all over the lot converged to enter the store. No sign of masks on the talkers, I got the impression they might not have been wearing them the whole time since the pandemic started - there actually are people around that still refuse to wear them at any time. And the body language of these three projected an attendant attitude, as though they had gone there intending to walk in without masks only to encounter the mask required signage and the woman in the chair....See More- 6 years ago
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