Sunday, April 23, 2017

Something in the Air

     Maybe there's something in the air -- something about spring and new beginnings and fresh starts. Our Baby Boomer bloggers seem to be in a reflective mood this week, taking stock of their lives and looking around to see what kind of people we have become.

    Carol Cassara at Heart Mind Soul realizes that at our age we have all grieved a loss. Or two or three. As an outgrowth of her own experience, she now acknowledges that it can be hard to understand the nature of grief, and at Grieving Too Long she offers some suggestions on how people can manage through the process.

     She goes on to demonstrate that whatever losses we may have suffered, it's never too late to start anew. In Healing Spirit Cassara explains how she has moved on from experiencing grief to starting a new venture -- one that may help you if you are having trouble moving past grief to a new stage of life.

        As for Meryl Baer of Six Decades and Counting, she never thought about growing old when she was a kid, and it never crossed her mind that she would some day be like the old folks. But it has happened, and now, at a get-together with friends, she realizes the similarities between her 60-something self and the older generation she knew and loved as a child.

     Do her revelations involve exercise and healthy eating? Or cataract surgery and hearing aids? Read about it and laugh at her post A Downside to Adding Up the Years.

     Meanwhile, Kathy Gottberg reminds us that wherever we go we bring our own energy -- our own vibration -- along with us, whether we're going to a party, talking on the phone, or just posting on Facebook. We all know this, she says, but the chances are we forget it from time to time.

     So when we encounter friends and colleagues, are we bringing our wholeness, wisdom and clarity, or are we bringing our worry, fear and pain? In her post Be Responsible for the Energy You Take with You she wonders: Can you imagine what might happen in the world if we all just paused for a moment before we spoke to another person and thought about the energy we are offering?

     Laura Lee Carter in her post Watch Out What You Wish For looks outward instead of inward. She reflects on the state of our country, what it says about our society and what we value in America today. Are we all about self-promotion and manipulating others? Is that what it's come to? Take a look at her post. You may or may not agree with her; but she will definitely get you thinking.

     And finally, Rita R. Robison blogging on the Survive and Thrive Boomer Guide, points out that while Earth Day just passed us by on April 22, we still have many Ways to Help the Earth Throughout the Year. For example, you can avoid using pesticides, grow your own vegetables, drive a low-emissions vehicle, join an environmental group. Which begs the question: What did you do to celebrate Earth Day?

     Or, another way to put it: You can sit around and complain about Donald Trump or the electoral college, or any of a hundred other things. But isn't it much more effective to actually do something positive, something you believe in, even if it's only in your little corner of the world?

Monday, April 17, 2017

The Truth Behind Your Taxes

     The deadline for filing our taxes is usually April 15. This year April 15 falls on a Saturday so the deadline is pushed to Monday ... but Monday is a holiday in Washington, DC (Emancipation Day), so Federal taxes are due on Tuesday, April 18.

     In honor of tax day I thought I'd update an article I wrote for the U. S. News Retirement website a couple of years ago. It gives us a brief analysis of what kind of behavior the government really encourages through its tax system -- and what kind it actually penalizes.

     Most people do not do their own taxes. They throw up their hands, decide it's too complicated and run to an accountant or H & R Block. A lot of people use electronic services such as Turbotax. This is kind of like doing it yourself, but the electronic process does hide some details of the tax system and how it affects you.

     I have always done my own taxes -- except for a couple of years when I tiptoed into an accountant's office and found out they don't necessarily do a better job, and they charge you an arm and a leg for the service.

     While it does take some time, and the process is not entirely painless, doing your own taxes can provide an educational experience. I'm not talking about practicing your arithmetic skills. I mean you find out what the government is really encouraging you to do (despite what it says) and what it really penalizes. In short, you find out how the world works.

     Here are ten lessons I learned in doing my own taxes over the last few weeks. 

     1. The Federal tax system penalizes workers. Not only do you pay the highest rates on the income you earn, but you also pay Social Security (aka payroll) tax of about 7% on your salary. Your employer pays an additional 7% -- which means, at least theoretically, they could pay you 7% more if they weren't giving that money to the government. But wait ... the government likes you if you make a lot of money -- once you earn more than $118,500 a year (or starting in 2017 more than $127,200), the government no longer takes its cut of 14%.

     2. Invest in the stock market. Some of the money you make from capital gains -- the profit from selling a stock for more more than you bought it for -- doesn't get taxed at all. The rest is taxed at a lower rate than the money you make on your job. Most stock dividends are taxed at a lower rate as well. 

     3. You're a sucker if you have a savings account, or buy a bond. The interest rate you receive from a corporate or government bond, or a regular savings account, is as low as it's been in decades. It's below the rate of inflation, which means you are actually losing money. The IRS doesn't care. It taxes the little bit of interest you earn at its regular rate, meaning you lose even more money.

     4. The IRS can't make up its mind about real estate. Real-estate investors can take advantage of certain tax breaks, such as depreciation; but are excluded from others. Rental income is taxed at the full rate, as opposed to stock dividends which get preferential treatment. Bottom line: Investing in real estate can be a good deal, but it's not for everyone. 

     5. Or owning a business. Again, many tax breaks are available to people who work for themselves, such as deductions for "travel and entertainment." But there are drawbacks as well. For one, you have to pay both the employer's and the employee's part of the Social Security tax. And the tax-filing process can be confusing and complicated, requiring obsessive record keeping, mind-numbing calculations ... and usually the expense of paying a professional accountant.

     6. But it does want you to save for retirement. The government offers a wide (some would say overly complicated) array of options -- such as the IRA, the Roth IRA, the SEP IRA, the 401(k) plan – which allow you to escape, or at least defer, taxes on your retirement savings. 

     7. It wants you to get health insurance through your business, but not on your own. The IRS doesn't tax the income you use to pay for health-insurance premiums, but only if you get medical insurance at your workplace or through your own business. If you buy medical insurance on your own, including Medicare ... no tax break for you! 

     8. The government will cut you a break if you're sick, but only if you're really sick. You can deduct out-of-pocket medical expenses, including dental expenses, that exceed 10% of your income, or 7.5% of your income if you're age 65 or over. 

     9. The government wants people to go to college. The silver lining to the ridiculous cost of higher education is that there are several ways to deduct a portion of college tuition on your Federal tax form. Many states offer tax breaks for educational expenses as well. The 529 College Savings Plan is a relatively simple and easy way to avoid taxes on money you put aside for college ... for yourself, or anyone else in the family.

     10. The government doesn't want you to do your own taxes. The Federal tax code reportedly runs 70,000 pages or more (people can't even agree on how long it is), and details all kinds of rules, regulations, breaks and penalties. Plus, there are many more pages at your state level. The whole process is way too complicated for the average person. The IRS really wants you to pay an expert, who is more likely to get it right, and who will file electronically, saving the government (but not you) a little bit of money.

Friday, April 14, 2017

The Old Woman

     We're buying a house and moving to Pennsylvania in a couple of months. But meanwhile, we're living in a condominium in Connecticut. The complex has a pool and a gym, and we can walk to town. It is not an age-restricted complex. But the woman in the building next to me is a widow well into her 80s. She walks slowly, with a cane, but lives independently (although her son comes to visit her regularly), and she clearly has a strong backbone.

     Still, I'm glad that not everyone here is a senior citizen. Sure, more than a few of us are collecting Social Security. But there are middle-age couples and even a few kids around -- not many, but enough so the school bus stops at the entrance to the main road. The majority of the population consists of single men and women. My building has four units. The two upstairs are inhabited by single men who are hardly ever here. Ben lives next door. He's a little older than I am. He works a couple of hours a day at the deli and also volunteers for the town's fire and rescue operation.

     One aspect of living in a condo is that there are a lot of rules. When B and I moved in last summer we noticed there was a window box full of flowers on the front of the building next door. This inspired B to put a hanging flower basket outside our door. But a few days later we got a notice informing us we were prohibited from placing any personal items outside our unit. It had to go, or there would be a fine.

     A few days later we saw Ben outside our building and we started talking to him. He was telling us that the old woman in the next building -- the one with the window box -- likes to take care of the rosebush out front. She wasn't supposed to. We have groundskeepers who take care of that. But this woman has adopted the plant, and nobody seems to have confronted her about it, and so she fertilizes the plant and trims it back on her own schedule.

     As we were talking the woman came outside, walking slowly and using her cane. She evidently knew Ben and so she came up and started talking. Ben introduced us as the woman fussed over a couple of flowers. After a little while I felt comfortable enough to tell her we'd tried to put a hanging basket outside our unit, but we were told to take it away. How was she able to keep her window box?

     She looked at me. "Oh, those people in the management office. They keep telling me to take it down, but I just ignore them."

     I don't know if the woman gets away with it because she's feisty and determined, or if management leaves her alone because she's old and alone and they feel sorry for her. Or maybe they just don't want to confront a sympathetic older woman (unlike United Airlines that belatedly regrets confronting its passenger).

     Anyway, the other day B sent me out to the laundry room in the basement of the building next door to switch the clothes from the washer to the dryer. On the way I saw Ben and the woman standing there and studying the rosebush. "Do you know anything about roses?" the woman asked me.

     "No, not at all," I confessed.

     She was fingering the tips of the branches, which looked to me like they had old buds on them. She was wondering if the late cold snap had done any damage, and she and Ben were discussing what should be done. Then she poked her cane at some lower branches. "These are dead. They should be cut off." She paused. "I don't know if I can bend over far enough to get at them."

     I continued inside, changed the laundry, and when I came back out Ben had disappeared. The old woman was walking in. She stepped up the one step to the little front porch and faltered. She reached out her hand, and I held it to support her. She struggled up the step and turned to go in the doorway. I held the door for her and she negotiated one more step into the hallway.

     Then she turned. She looked at me and smiled a knowing smile. "Never get old," she said.

     I didn't know how to respond; just made some innocuous comment. But as I walked back to my unit, I realized ... I admired her.

Sunday, April 9, 2017

Our Best Place to Retire: Part 2

     We had dinner last night with some old friends who we hadn't seen in a while. We caught up on a lot of things, including the fact that we're moving away. We told them some of the reasons why we're relocating, and they congratulated us, and then the woman asked, "Did you consider moving to Heritage Hills?"

     Heritage Hills is our local 55-and-over community. We know a few people who live there. But as I told our friend at dinner, the reason we didn't consider it was because of a friend of B's who I remember talking to at a Christmas party. She and her husband had sold their house about five years ago and bought a condo in Heritage Hills. But every time they went out the door, they'd see an old couple hobbling down the street. The swimming pool was full of elderly women doing water aerobics. The restaurant was crowded with widows.

     Yes, there are some people in their early 60s who live there. But most of them are still working; they're gone all day. The people you see are those in their 80s, who hang around the place and never go anywhere. The woman said they found it depressing to constantly have the feeling they were living in an old-age home. It made them feel as if they were 20 years older than they really were.

James Michener Art Museum
     So they sold their unit and bought another condo in town, one that was more integrated into the community, that had a greater diversity of residents, that didn't indelibly mark them as old geezers.

     Maybe some of you feel differently, but B and I just decided that we weren't ready for an age-restricted community -- and maybe never will be.

     There are so many issues involved in choosing a place where we are going to retire. Most of us stay right at home. Maybe we downsize to a smaller house or a condo, but we don't move very far away because of friends and family and ... let's face it, familiarity. Those who do move tend to go someplace where the living is easier, the cost of living is lower, and the sun is always shining.

Bucks Co. in southeastern PA
     B and are doing neither. We are moving to Bucks County, Pennsylvania. We've both lived in Westchester County, NY, for the past 40 years. We determined to move out of Westchester when we retired. And so now we have picked Bucks County, which, like the Volvo compared to my Saab, is about as close to Westchester as you can get, without actually being in Westchester itself. It's kind of like, if you lived in the Washington, DC, area, moving from Maryland to Virginia; or if you lived in California, from Sonoma to Santa Cruz (maybe ... I'm not so sure about that one).

     So anyway, we're left to ponder the question: We say we want something different, but do we really want something different?

     Bucks County is north of Philadelphia, as Westchester is north of New York City -- urban in the south where it abuts the city, more rural as you move north. It's basically a suburban area with lots of trees, some preserved farmland, and a temperate climate. Also, like Westchester, Bucks is home to several historical people (including writer James Michener). If you just looked around in Bucks County, without knowing where you are, you might think you were still in Westchester.

One of ten covered bridges in Bucks Co.
     But we have made a few changes. We used to live in a 1970s development a few miles out of town. We had to drive everywhere. Now we're moving into town. We'll have a sidewalk, and we'll be able to walk a half mile or so to downtown, past some old Victorian-style homes, past a school and a church, along tree-lined streets to a coffee shop, a restaurant, the train station, or the movie theater.

     We are downsizing, from about 2800 square feet to 2100 square feet, and from one acre to one-sixth of an acre. Our little backyard is fenced in, so it will be perfect for our dog. We used to have a well and a septic tank. Now we'll have town water and town sewer. And for the first time in my life ... a garbage disposal!

     Our expenses will be lower. The real-estate tax on this house is less than half what it was for our old place in New York. The heating bill will be less; the electric bill less, and since the house is smaller (although not any newer) we're hoping it has lower maintenance costs.

     Also, Pennsylvania is one of 13 States Without Pension or Social Security Taxes. New York levies income tax on IRA withdrawals over $20,000. Connecticut taxes it all ... even your income from Social Security!

We can walk here
    There are some drawbacks -- for, just because you're retired doesn't mean you don't have to compromise. We'll be closer to B's family, and we have one friend who lives nearby. We'll be no farther from my son in Brooklyn, and a little closer to our kids in the Carolinas. But for the most part, we'll be starting over, making new friends and finding new activities.

     And honestly, if left to my own devices, I might have picked a place with a warmer climate. This area of Pennsylvania is marginally better than New York -- the average April high is 63 degrees, for example, compared to 59 degrees where we used to live -- which means spring comes a week or two earlier. But that's a compromise I've made with B, not Pennsylvania. B does not want to live in Florida (and, honestly, neither do I), and she doesn't want to go to the Carolinas, even though her son now lives there.

     However, winter is not as big a deal as it once was, because we are not just relocating to a new home. We are changing over to a more mobile lifestyle. Our house will no longer consume as much of our financial resources, so we will be able to rent for a month in South Carolina, maybe more. We will go to Cape Cod or Cape May for two weeks in the summer. We might even travel a bit ... although, honestly, B and I both go against the retirement grain when it comes to traveling. We know a lot of people dream of visiting exotic places after they retire. We just don't have the travel bug.

     So we're not following the typical retirement stereotype. We're not going to take a cruise or fly to Europe. We're not moving to Florida or Arizona. We're not going to live in a 55-and-over community. What we are doing is what we want to do, not what is expected of us.

     Still, it's a big move, as it is for any retiree. So let the adventure begin!

Thursday, April 6, 2017

Best Place to Retire (for Us): Part 1

     B and I sold our family home last summer. We've been living in a one-bedroom condo while we decide where we're going to settle down in retirement. Now we have finally found a destination. We've put in an offer on a house. We'll see if it works out.

     Where is it? Well, be patient and I'll tell you.

     First, I have to explain a little bit about our thinking and how it's affected where we're going -- because the issues we considered in deciding on a retirement home are more relevant to most retirees than the actual destination we chose. Don't you think?

     One issue is that, like a lot of people, we thought we might want to retire someplace different from what we're used to. We love Cape Cod. A lot of people from the Northeast (and some from Canada) make their retirement home on the Cape. We have one friend who lives in Falmouth. But for us, Cape Cod seems too far away from our children, who are in New York, New Jersey, North Carolina and South Carolina. It's a long way for them to come visit -- and a long way for us to go visit them.

     Plus, another issue. Those Massachusetts winters are long and cold and desolate. A few years ago we spent a weekend in November on the Cape. It was beautiful in a stark, lonely kind of way. But stay there for more than a few days, much less the whole winter? I don't think so. My preference would be to retire somewhere that's warmer, not colder.

     I might even consider Florida. I've been going there for a couple of weeks in the winter, for at least the past 15 years. But B does not like Florida. So we're not going to Florida.

     We did not consider the West Coast. B has a sister living in Seattle, and I have a sister in Phoenix. But all our kids, and our friends, are in the East. That's definitely an issue. And besides, we like the rolling farmlands and forested hills of the East better than the stark mountains and empty spaces of the West. We like living in a more settled area, where the towns are close together and even the major cities are not that far away. Currently, we can get to New York City in a little over an hour. Boston in three. Washington, DC, is an easy train ride. We'd like to keep it that way.

     We tested out South Carolina for a month this winter, principally because B has a son -- and now a grandchild! -- who lives in Charleston. I also have a friend in nearby Myrtle Beach.

     B and I both liked the Charleston area . . . as a place to visit. But to live? The city seems small, and it's not near anything else, so there's no other place to go. And there is a lot of traffic. The area is growing like crazy, and the road-building has not kept up with the influx. As B's son reminds us, Charleston is located along three rivers. All the traffic has to go over a few bridges, and they form major bottlenecks. If you want to go anywhere during the week between 7 a.m. and 10 a.m., or 3 to 6 p.m., you're going to get into a traffic jam. It's that simple.

     We also thought about Washington, DC. We like the city. But it's too expensive. We made a couple of visits to Annapolis, MD. It's a nice small city, near Washington, but while Annapolis is not quite as expensive as Washington, it's still too dear for those of us on a fixed income. We don't know anyone who lives there, and we wouldn't necessarily fit in with the Navy men and the resident boating crowd.

     We want to be able to afford the place we're going to live, not just for the next few years, but presumably for the rest of our lives. And I think it's important for any retiree to feel like they're going to fit into their new environment -- and it sure helps if they have family there or at least know someone who lives in the area.

     So anyway, now we've finally decided on a place. But before I tell you, I have to say the whole process makes me think about my car when I was younger. I liked to drive a Saab. It was a practical sedan, with four doors; it was good in the snow, but also had a sporty feel and a little of the European pizzazz. But it doesn't matter why I liked the Saab; the point is, I did. I bought a used Saab in 1976, then a new one in 1978. My wife and I got two more Saabs in the 1980s.

     By 1994 we were ready for a new car. I was sick and tired of fixing my Saabs, which had a well-deserved reputation for not being very reliable. And besides, by then we had two small kids and were looking for something more practical.

     We looked at a Honda Accord and a Ford Explorer and some kind of VW, I forget which model. We also, I must admit, looked at the new Saab. But I was determined . . . it was time for something different.

     So finally, after shopping around for months, we bought a Volvo. A different car. But then I realized, a Volvo was a four-door sedan from Sweden. It was good in the snow, but also had a little bit of a sporty feel and a little European pizzazz. The Volvo was as close to a Saab as you could get, without actually being a Saab.

     So why the story? Because B and I have decided to move to a different place. But in many ways it's very similar to the place we've been living for the past 40 years.

     It's . . . wait! Tune in next time for Part 2, and I'll tell you.

Sunday, April 2, 2017

Are You Ready?

     Did you play a prank on someone yesterday, or have one pulled on you? This is the best one that ever happened to me, and so while I wrote about it once before, I'll share it again.

     Around where I live we start playing golf in the beginning of April. It was opening day of the season a few years ago. My friends and I usually play at one of our local public courses, but this year we wanted to get the season off to an especially good start. We decided to travel up the parkway and play at a really nice links course in the country.

     The course is about 40 miles north, or close to an hour's drive. So my friend -- the friend I call Peter -- and I decided to carpool. Now if you knew Peter, you'd know he's a little . . . well, how do I put this? We all love him; he's fun to be around; he's really a great guy who'd do you any favor in a minute. But he's a little quirky, a little unpredictable.

     Just one quick story about Peter. A few years ago, when he was getting a divorce, he decided to take a vacation to Australia. He went by himself. He arrived at the airport and picked up his rental car. Did he want the insurance? Usually you answer "no" to that question, because it's expensive and a rental car is often covered by your credit card or regular car policy. But Peter wasn't even thinking about that, and so just signed on the dotted line.

     He threw his bag in the trunk, got in the car, and drove off the lot onto the highway. Then he remembered he'd put his hotel information in his bag. In the trunk. So he pulled over onto the shoulder of the road. He got out, leaving the door open, went around to the back of the car and opened the trunk. His head was buried in the trunk when . . . WHACK! A pickup truck clipped his open door. The car door went flying off in an explosion of metal and plastic.

     The truck stopped. It was hardly damaged. Peter was fine. But the rental car had a big gaping hole on the driver's side where the door was supposed to be.

     Peter stood there for a moment. Then he shrugged. He got back in the car, turned around and went back to the rental car lot -- not 15 minutes after he'd left. He returned the car and explained what happened. They gave him a new car, and he drove off to enjoy his vacation.

     This could only happen to Peter. So it shouldn't surprise you to know that I told Peter I'd be happy to be the one to drive to the golf course. We arranged to meet at the mall by the parkway. He'd leave his car there; and I'd drive up to the course.

     I pulled into the lot next to Macy's, as we'd agreed. He wasn't there yet. I parked; I looked at my watch; and then I saw Peter drive up. He parked next to me, pulled out his golf bag, and I motioned for him to throw his clubs in my backseat.

     He put in clubs in the back then opened the passenger door and got in. "Sorry I'm a little late," he apologized.

     "No problem," I said.

     "I had to take my medicine this morning."

     "Oh, what medicine?" I asked.

     "Well, have you ever had a colonoscopy?"

     "Yeah, sure."

     "I'm getting my first one tomorrow. So, you know, I had to start the medicine today."

     "The medicine?"

     "Yeah, the stuff that's supposed to get you ready for the procedure. It cleans you out. I wasn't allowed to eat breakfast this morning either. I'm really hungry."

     "Wait a second, Peter . . . you mean the laxative?"

     "Yeah."

     "Peter, don't you know, we'll be on the golf course for four hours. It's an hour drive up there. Another hour back home. We'll be gone for six hours."

     "Yeah. So what?"

     "But . . . have you ever had that stuff before?"

     "No, why?"

     I was breaking into a cold sweat, imagining Peter exploding all over my car. "It makes you go to the bathroom. That's the whole point."

     "Oh, I can hold it. No problem."

     "What do you mean, hold it? You can't hold it!"

     "No, really, I can hold it."

     "Peter, you're . . ."

     Then Peter looked at me. A big smile crossed his face. "April Fool!"