Friday, November 30, 2012

What, Me Worry About the Fiscal Cliff?

      A few weeks ago I wrote a piece about the fiscal cliff for the U. S. News retirement site. I saw that the so-called "fiscal cliff" was on the horizon and thought people should know about it. But in all honesty, I figured that the fiscal cliff was kind of a manufactured crisis and that it would go the way of Y-2K after the election was decided and politicians in Washington came to their senses.

     Now I'm not so sure. Perhaps I'm giving people in Washington too much credit.

     The term "fiscal cliff" is shorthand for a series of federal spending cuts and tax hikes that will automatically go into effect in January, if Congress and the President don't get together and act to override them. The measures originated in Congress last year as part of a compromise to pass the Budget Control Act of 2011.

     The
tax hikes include ending the temporary reduction in the payroll tax (which funds Social Security), ending some tax breaks for businesses, changing the alternative minimum tax and inaugurating some taxes to start paying for the Affordable Care Act. They will also affect certain tax credits for college tuition and low-income families. 

     At the same time, the White House has detailed a whole list of budget cuts that will affect over 1,000 government programs, including $55 billion in defense cuts and $11 billion in lower Medicare payments.

     The fiscal cliff presents a giant air pocket for the entire economy. But there are a few ways in which it would affect us seniors in particular.
  

     For example, if you rely on stock or mutual fund dividends to help fund your retirement, you can expect to take a "pay cut," as those dividends, currently taxed at maximum rate of 15%, will be taxed at ordinary income rates, up to about 40%.

     Do you have any capital gains on investments you might have made five or ten or twenty years ago? Again, the tax rate would go up on them. The maximum tax rate on long-term capital gains (investments held longer than a year) will increase from 15% to 20%. Meaning, again, if you plan to cash in some investments to help fund your retirement, you will be forced to take a pay cut.

     And if you do own any investments, either in your IRA or elsewhere, the value of those assets will likely go down. In theory, the value of an investment consists of the after-tax sum of all future returns. If as most experts predict, the economy suffers after going over the fiscal cliff, then those returns will be lower. And to add insult to injury, those lower returns will be taxed at a higher rate.

     It only makes sense that the stock market, as well as private business investments, would deflate to a lower level. High-dividend stocks, defense stocks and banking stocks might be the biggest losers. But even more stable investments in health care, energy and agriculture would probably be a bad bet, since going over the fiscal cliff would leave everyone black and blue.

     And then there's your home. No one knows how the fiscal cliff will influence mortgage rates. But with less government spending, less employment, less after-tax income, and a less robust economy in general, it's hard to see home prices rebounding in any meaningful way. In fact, the fiscal cliff could rachet down value of your house yet again, as funds are squeezed out of the housing market to shore up the rest of the economy.

     And if all this isn't enough, there are the cutbacks. The government spends a lot of money, and if it spends less, then there will be across-the-board cutbacks to government programs, bringing hardships to beneficiaries as well as lower revenues to the thousands of companies that do business with the government.

     More particularly, the fiscal cliff aims to cut some $11 billion out of Medicare, in part by lowering payments to doctors. This could mean individual patients will have to pay the difference. Alternatively, it could put cost pressures on medical facilities, forcing them to reduce staff. Lower payments could also lead doctors to limit the number of Medicare patients they will see. The fiscal cliff could make it harder for some people to find a doctor, and could mean longer wait times and lower quality of service for those who do.

     There is arguably one benefit to the fiscal cliff. Social Security. No, your benefit will not get any higher. But the fiscal cliff automatically ends the 2% payroll tax "holiday" enacted under President Obama in 2010. Since the payroll tax funds Social Security, restoring the higher tax rate will repair some of the damage done to the funding of the program.

     But is that worth all the other pain and suffering that will be brought to you by the fiscal cliff? I doubt it.

      To be sure, there's no reason why Congress couldn't do both:  Reinstate the payroll tax to shore up Social Security and then also make some kind of deal to avoid all those other economic problems. But that would require them to grow up and act like adults. What are the chances of that? 

     P. S. To see what's currently going on in Congress, to witness all that your representatives are doing on your behalf, to view all the frenetic activity going on in Washington to save the situation, check out the Capitol webcam.

 

Tuesday, November 27, 2012

"Do It For Me"

     The other day I was driving along a state road outside of town when I saw a sign -- Free Clean Fill. Oh man, I thought, I have a little corner of my yard that washed away in the storm the other week. This would be great. I could fill it in.

     I went home, got two outdoor garbage cans, put them in the back of B's van, and returned to the state road. On the way, I remembered I once got free dirt from the town, and I hurt my back lifting the dirt-filled garbage cans out of the rear of the car. They were heavy! So, I cautioned myself, this time be careful.

     I only filled the garbage cans half full. I hefted them into the car. They were still heavy -- dirt is heavy -- but I did get them home. I emptied them into the corner of the yard, and I didn't hurt my back.

     Then I woke up the next morning. My back was fine. But I had a pain all down my right side. I climbed out of bed, gulped down some Advil, and struggled through the day. Now, three days later, my shoulder and the right side of my chest still hurt.

     And thus concludes my latest venture into DIY -- an abbreviation we're all familiar with, meaning "Do It Yourself."

     I have been struggling with DIY ever since 1977 when as a callow young fellow I bought my first house, and was surprised and disappointed to find out that the bathtub faucet in the hall bathroom didn't work.

     I made a trip to the hardware store and spent $75 (back then, a lot of money) on two different state-of-the-art wrenches plus a pair of pliers and a few other things the guy at the hardware store told me I would need. Then I went home, managed to get the shower hookup off the bathtub wall, only to find that the fitting looked nothing like what the fellow at the hardware store said it would look like.

     So I went back to the hardware store with my piece of plumbing. The guy took one look at it and guffawed. "I haven't seen a fixture like that in 20 years! How old is your house anyway?"

Wanna buy a wrench? Only used once!
  
     Nevertheless, he sold me some more equipment, for another $30, which he assured me would work. I returned home and wrestled with the pipes again. Make a long story short, after cutting my finger, spraining my wrist, and wasting an entire Saturday -- a precious weekend day, down the drain so to speak -- I called a plumber and had him fix the faucet. For another $75. (Like I said, back then $75 was a lot of money.)

     I've had a kind of love-hate relationship with DIY ever since. There was the time I stepped on a nail trying to fix our mailbox. The time I slashed my leg with the electric clippers when I was trimming our front hedge. The new attic stairs I installed . . . that came crashing down two days later. And don't ask what I did to my daughter when she was helping me out in the backyard one afternoon. Suffice it to say, you can barely see the scar anymore.

     Do you remember the 1990s TV show Home Improvement starring Tim Allen? It was supposed to be funny. I didn't get it.

     But on the radio the other day I heard a new acronym:  DIFM. It's the abbreviation for "Do It For Me." Instead of selling you some equipment and sending you home to do it yourself, the store sends someone out to your house to do it for you. It costs a little more, but still, this is a strategy I can support.

     I heard the term on some kind of business report. Apparently, Home Depot and Lowe's are facing retailing challenges because aging Baby Boomers are starting to fall out of love with DIY. They are beginning to prefer DIFM -- a trend that's been going on for a few years but is building as Baby Boomers get older.

     I think they're onto something. I have an electrical socket on the back wall of the kitchen that shorted out a while ago. Instead of electrocuting myself in another attempt at DIY, I think I'll go over to Home Depot and see what they have in the way of DIFM . . . after I take a few more Advil and my shoulder stops hurting. 

    

Saturday, November 24, 2012

Who Wants to Live Alone?

     Do you live alone? Have you ever lived alone? For many people, it's their lifestyle of choice or circumstance. As for me, I am thankful that I don't live by myself. For one thing, I'm not used to it.

     I lived with my family as a kid, and from there went straight into a college dorm with a roommate. After graduating I moved in with a friend; then got married and set up housekeeping with my wife. I never lived alone until after I got divorced -- and, really, not even then.

     My wife and I separated and sold our house just as our daughter was going off to college. But after I moved into a condo, I shared joint custody of our son, who lived with me three days a week until he went away to college. Even after that, my daughter came by occasionally and my son still had a bedroom in my condo, with plenty of his stuff jammed into my closets, and he spent a lot of time with me during school vacations.

     The summer before my son graduated from college, B and I moved in together, with her two sons, and I was back to full family mode. Even now, with all our kids graduated and working and living in their own apartments, B and I are together, and it seems at least one of the kids is here for a few days each month.

     I did enjoy my brief period of living by myself. But still, I wasn't entirely alone. And it was only after I had been "overfamilied" for a while, and needed a break. Plus, it was only temporary.

     But I don't think I'd like to live by myself on a permanent basis. Why? Because I'm not that good company for myself. I don't know if I just get lonely. Maybe I do. But, mostly, I spend too much time stewing in my own thoughts, reliving episodes in my past -- mostly the bad ones, not the good ones -- or pining over lost loves, lost friends, or so-called better times.

     What got me thinking about this was an article I saw about a book called Living Solo: The Extraordinary Rise and Surprising Appeal of Living Alone, by Eric Klinenberg (Penguin 2012). The NYU sociology professor spent seven years investigating the world of single adults. Today, more than half of American adults are single, and some 32 million of them live by themselves -- including over half the adults in New York City and Washington, DC.

     Klinenberg discovered that many stereotypes about singles are either exaggerated or just plain wrong. For example, he found that singles are more likely than couples to make friends with their neighbors. They are more likely to volunteer, exercise, take classes and attend public events such as concerts and festivals.

     But there are also downsides to the single life. Aside from the obvious -- yes, it's true, swinging singles, on average, have less sex than married couples -- he found that many public policies from housing to health care are geared toward families and couples. Also, during times of crisis, singles tend to suffer more. For example, he studied a Chicago heat wave that occurred in 1995, which killed 750 people. Those most likely to die were individuals who lived alone and had no close-by family or friends to help them out.

     Yet, he also found that many singles -- particularly older singles -- are not lonely outcasts who are unable to find a mate. Instead, as a class they are empowered individuals who refuse to marry just for the sake of marrying, people who live by themselves rather than share housing with people they don't like or who they know are a bad influence, and divorced men and women who have blossomed with their new-found independence. The conclusion: Living alone may not be a mark of social ineptitude, as so often assumed, but rather a sign that someone is in control of their life and mastering their circumstances.

     I guess there are always two sides to a coin. I did enjoy my own brief sojourn as a semi-single. But I never got comfortable enough to dine alone at a restaurant. I felt self-conscious going to the movies by myself. And while I enjoyed some days of solitude, there were too many times when I was home alone in the evening, and wishing there was someone else to talk to, to share a meal with, to laugh with, and to keep my bed warm at night.

    So when John Agno over at So Baby Boomer asked me what I am thankful for at this time of year, I can say that, above all, I am thankful for the other people in my life. Especially for B, who puts up with me every day. But also for my kids, who come around periodically to make fun of me, and for friends who occasionally come over to play cards or share a meal.

     As a postscript, let me tell you that B and I had friends over for Thanksgiving dinner (one of our four kids was able to join us). The friends brought a relative with them. He is a widower, with no children, who lives by himself. We didn't know him, had never met him before. But he was a great addition to our Thanksgiving mix, contributing to the conversation, and obviously thankful to be included in our holiday celebration. We were lucky to have him.

     Oh, and just for the record, Eric Klinenberg has a family, he does not live alone.

Wednesday, November 21, 2012

'Twas the Day Before Thanksgiving

     If you've seen this please forgive me, but I thought it was funny so had to pass it on. I got it from the Holiday facebook page (and presumably they got it from Bizarro, but I couldn't find it there). Anyway, there's plenty more where this came from -- go check 'em out if you're interested. Happy Thanksgiving!



Monday, November 19, 2012

My Blood Ran Cold


     Yesterday I received a bill from my medical group. I picked it out of the pile of mail with great trepidation. My insurance is supposed to take care of this, I thought to myself in a panic, that's what I pay them for, over $600 a month! So what could be wrong? Am I going to get socked with some outrageous bill? Did something fall between the cracks?

     I swear, if you don't have high blood pressure and stress-related anxiety problems before you get a medical bill, you sure will afterwards.

     I threw the envelope on my desk; I couldn't deal with this right away; I'd look at it in the morning. So this morning, with shaky hand, I reached over and picked up my letter opener, slit the envelope, took out the bill, and unfolded the sheet of paper. My eyes quickly darted down a short list of items and found the bottom line. I owed $50.

     Whew, $50, no problem. But wait a second, that's my co-pay. And I paid the copay at the medical group when I saw the doctor (good luck getting into see the doctor if you don't pony up your copay).

     So I Xeroxed my credit card slip, plus the receipt I got at the doctor's, and sent it in to the billing address of the medical group. Hopefully, it's just a mistake on their part, and that'll  be the end of it. Although I know my daughter went into an urgent care center when she was here over Christmas 2010. She called her insurance company in advance to make sure her visit was covered. She gave them her numbers, filled out the papers. Long story short, she's still getting bills for that visit, almost two years later.

     Anyway, after mailing my response, I went to slip the bill into my filing cabinet -- and noticed the rest of the itemization. I'd had a problem with my finger, and in point of fact, I actually hadn't seen a doctor. I saw a Physician's Assistant. The PA was actually a nice guy, and seemed perfectly fine, and also seemed to know what he was doing. But he's not a doctor. Yet I had to pay the same $50 copay. Then the group billed my insurance company an additional $125 -- which, I hate to say it, actually doesn't seem that excessive as far as medical bills go.

     The PA gave me a Cordisone injection into my finger. A little vial of fluid. Took him about 30 seconds to administer the dose. And the cost?  $525.

     Doesn't that seem a bit excessive?

     I read in the New York Times today that there is a shortage of some medicines -- not Cordisone, but some others. I'd think that, at $525 a pop, there'd be enough profit it in so that plenty of companies would be making plenty of medicines.

     I don't know what the solution to the health care crisis is. Maybe having me see a Physician's Assistant instead of a doctor, for my non-emergency problem, is part of the solution. But still, the bill for my 15 minute visit was $713. Clearly, something has to be done about the costs of health care.

     I agree with the president and others who think it's important that all American have access to medical care -- at least some medical care, if not the very top-of-the-line care. You know, preventative care, basic care, etc. But at the rate we're going, it seems we'll soon be spending our entire gross national product on health care, with nothing left over for houses and cars and restaurants and vacations. We'll just spend all our time taking care of one another and never get anything else done.Surely, that's not the solution.

Friday, November 16, 2012

Lessons for a Long Life

     An item this week that caught my attention, and might catch yours . . .

     I saw an article "The Enchanted Island of Centenarians" in the New York Times Sunday magazine at the end of October (just before my lights went out), published in advance of the second edition of a book called Blue Zones by Dan Buettner, which came out last week from National Geographic.

     Buettner is a longevity expert who travels the world looking for areas where people live long and happy lives -- including Okinawa where the world's longest-lived women are found, and a region in Sardinia with the highest concentration of male centenarians on Earth. He then collected and analyzed the attitudes, lifestyles and behaviors of these people who on average lead healthy lives well into their 90s and even past 100.

     Buettner found his latest blue zone in Ikaria, Greece, an island in the Aegean Sea, where men are four times more likely than American men to reach the age of 90 (the regions are termed "blue zones" simply because Buettner circled the areas on his map in blue ink). People in Ikaria also live noticeably longer than their neighbors in Samos, a more developed island just ten miles away.

     If you want the full story, you can get Buettner's book in paperback or on kindle. But the basic idea is that there are a number of behaviors that promote longevity. The people on Ikaria eat a diet low in the saturated fats that come from meats and diary, and they consume almost no refined sugar. Instead, they drink goat's milk and consume lots of olive oil and wild or unprocessed greens. By eating greens from their gardens and the fields, they ingest fewer pesticides and more nutrients. They drink wine almost every day, but in moderation, and they also drink two or three cups of coffee a day (coffee is associated with lower rates of diabetes, cancer and Parkinson's).

     The Ikarians also get plenty of sleep, and never hesitate to take a midday nap. Also, about three-quarters of the senior citizens have sex on a regular basis.

     These islanders prize their social lives. They rarely dine alone, for example, but always make a meal into a social occasion with family and friends. Buettner surmises that being engaged in the community not only gives people a sense of connection and security, but the lack of privacy may act as a check against self-destructive behavior, including crime. Ikaria has a low crime rate not because of good policing, but because everyone knows everyone else's business, and it's hard to get away with anything.

     The Ikarians tend to get up late, and take a relaxed approach to work. But they're not lazy. Many hold more than one job, and the concept of "retirement" with a gold watch and a 401K plan is completely foreign to them. They take pride in being self-sufficient. No one is rich, but everyone has enough food and a roof over their heads. They also get a fair amount of exercise -- not by sweating at the gym or training for marathons, but by walking almost everywhere they go, and never worrying too much about whether they're going to be late or not.

     One lesson Buettener draws from his blue zones is that the long-lived lifestyle works best as a community-based project. It's easy to stay on a good diet if everyone in the neighborhood has a kitchen garden; it's hard if there are fast-food joints and displays of chips and candy bars everywhere you go.

     The lesson I draw is this: Invite some friends and family over for dinner. Serve fish and vegetables and wine; no dessert, just coffee (or tea?). Your guests should leave early so you can get a good night sleep, or engage in some exercise known to occur in the bedroom. 
     

Wednesday, November 14, 2012

The Retired Traveler


     A lot of people dream of traveling after they retire. Three or four of my friends have been to Hawaii. One couple I know spent a year in Paris. Another has been living outside of London for six months a year for the past ten years, ever since they retired. Other retirees winter on the beaches of Florida, or in the Arizona desert, or take extended summer vacations in Cape Cod or the Upper Peninsula.

     Me . . . I just took a long weekend sojourn to . . . drum roll, please:  Philadelphia!

     Here's the view outside my hotel window:



     And we drove around some suburbs:



     Then we came home through New Jersey.


     My advice to all current and future retirees. Once you've stopped working and your kids are gone, there's no better time to gas up the car, or buy some plane tickets, and take off for parts unknown.

     Just -- er, you don't necessarily want to follow in my footsteps.

     But, seriously, we were going to Philadelphia to visit some family -- and there's no better reason to travel than that. And we stopped by the historical section of the city, which is preserved very nicely, and really leaves you in awe that a small band of men, on this little town by the Delaware River, fashioned an idea for a nation that still serves us eight or ten generations later.


Thursday, November 8, 2012

A Week After


A blanket of snow
     The weather people were predicting that a nor'easter was coming through -- just ten days after Hurricane Sandy slammed into the Northeast (and followed through to the Midwest and up into Ontario) and while power was still out for thousands of people. To me, a nor'easter conjures up images of wind and rain and blowing leaves and yellow slickers. But what this nor'easter brought was snow.

Our pine tree
     Around here it started as snow, right from the beginning, and turned out to be a good, old-fashioned snow storm. It looked like the middle of January. Only . . . it was Nov. 7.

     Fortunately, additional power outages were kept to a minimum -- yes, a few more wires came down, but nothing compared to last week. The snow has now ended, but the wind still blows. I hope there's no more damage.

     I'm usually skeptical of people making hysterical pronouncements about how the weather is crazy, the climate is changing, the ice caps are melting. Hasn't the weather always been crazy?

We forgot to bring in our grill
     I think there's pretty incontrovertible evidence (despite what I see out my window) that human activity is causing the climate to warm up, and I believe -- seriously -- that we should all trade in our SUVs for a Prius or a Volt or a Leaf. But now I'm beginning to wonder if things are going beyond that.

     Stranger things have happened. Maybe those Mayans were right. So be careful out there, for 12/12/2012 is nearly upon us!

Wednesday, November 7, 2012

Out of Power, Out of Touch

     When you suffer a big storm and go without electricity for a while, you huddle closer to your family and neighbors, but feel cut off from the rest of the world. The daily routine is turned upside down, and instead of worrying about social issues, or thinking about the future, or even caring much about what's going on anywhere else, your entire attention is focused on staying warm, finding food, keeping clean . . . and flushing toilets!

     In our neck of the woods the election took a back seat to the all-important questions:  Did you get electricity back yet? Do you have a generator? Is it supposed to get cold tonight?

     Here are just a few scenes from around our neighborhood:









 



    Yes, we did get to vote in the election. But it seemed rather anticlimactic. So Obama won. Just like everyone's been predicting for the last year. What was all the sturm and drang about?

    The important news for us was that, after seven days, we finally got our electricity back. We still have no TV, no internet, no phone. (Right now I'm sitting in a coffee house with wi fi.) But our house is warm again; we have water; we have light.

     Please, I'm not asking you to feel sorry for us. First of all, after three days of suffering at home in the dark and cold, we ended up here:


     Yes, we managed to book a reservation at a nearby Hilton Garden Inn -- the place was packed, and they didn't even charge us an extortionary rate. We were grateful.

     More importantly, we know we didn't get hit nearly as bad as some other places -- Staten Island, coastal New Jersey, downtown New York City. The rest of the world goes on. But many people in these areas still don't have power; many lost their homes. And get this:  Now the weather people are predicting a nor'easter coming in later today, bringing rain, high winds and possibly snow. Just what we need.

     Last night, B and I still couldn't watch TV, but our DVD player was working. We searched our DVD library and found The Perfect Storm with George Clooney. Seemed fitting.