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North Shore Nostalgia

It is difficult to say what draws a person to a particular place.  I spent only four years of my life living in the north woods city of Duluth, Minnesota.  My house sat 8 blocks uphill from Lake Superior, the world’s largest fresh water lake by area.Four years is a small portion of a 63 year lifetime but I sometimes describe my time here in such warm detail that my listeners assume that I grew up in Minnesota.

It is a cold part of the world,partly because of the northern latitude but also a result of the frigid water mass nearby.  Yet I’m here with my easily chilled husband (Bill says this is an exageration) sleeping in a tent pitched in the Grand Marais Municipal Campground, a few steps from that giant body of water.

My love for this area can’t be explained by a yearning for a simpler time in my life,though perhaps for a more intense time.  My son was six months old the October that my first husband and I arrived in Duluth.  We bought a first home,excited and nervous.  I began that first year cold and lonely.  Within two years my marriage had failed and with it my image of what I thought my life would be.

But it was also a vivid four years.  Black bears sometimes ambled among the neighborhood swing sets.  Caring people welcomed us,and then me, unpartnered.  The air smelt of pine and flocks of birds migrated through town, funneled by the great lake they wouldn’t cross.  I learned to crosscountry ski by moonlight and heard wolves howling in the distance.

My son learned to talk and added the word “gall” to his toddler vocabulary as I patted the giant growth on our front yard tree.

So my generous husband, Bill and I started our gentle adventure by revisiting some of my old stomping grounds. First a night in St. Paul with my son. St. Paul is also the city where my grandfather changed trains on his homesteading adventure to Saskatchewan in 1906.  There will be more about Saskatchewan and grandpa later.

Next we spent two nights with old friends who baked bread and served wood fired pizza to a gathering of folks I hadn’t seen in years.  These friends have aged and changed a bit – but somehow seem not so different from all those years ago, kind and involved in their community.

And then we were on our own,driving up the North Shore of Lake Superior, visiting State Parks, which much like old friends, have matured and changed but remain essentially the same.  Gooseberry Falls has a fancy visitor center.  But the falls were essentially the same, perhaps more torrential than I remembered due to a recent two inch rain.

Tettegouche State Park has spruced up its trails but they still lead to cliff top views of Lake Superior.

Bill and I had been to Grand Marais to cross country ski and I had hoped to show him a warmer Minnesota.  It wasn’t as warm as I hoped.  The grays of the overcast skies met the steely gray water with highs that only reached the 50s.  Warm weather was yet to arrive.

 

 

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Taking the Leap – When Should You Retire?

It’s Saturday morning, the heat has broken and a lovely cool breeze is blowing.  Yesterday’s rain washed out the humidity and I’ve been out hanging my clothes on the line.  Children are laughing and playing in the park behind our house.  But it doesn’t matter that it is Saturday.  I could have hung these clothes out yesterday if I hadn’t been so busy looking at bicycles with my husband, attending a going away party for a staff member at a nature center where I volunteer, planning a trip to Yosemite, or working on a sweater I’m knitting. 

Finally, retirement!  Last December I took the leap.  And I’m returning to the blog to report on how it is going. 

If you spend any time reading about retirement, you know that the timing of retirement is not a simple decision.  Headlines run the spectrum:  “Baby Boomers Ill-Prepared to Retire” to “You Don’t Need as Much as You Think to Retire”.  I sometimes follow an early retirement forum and there is a lot of talk about the OMY (one more year) syndrome.  You think you have enough but then chose to wait one more year.  And then another, and then another…

Rather than rehash these discussions, let’s see how my first half year has gone.

Unexpected Health Issues:  Not for me, but for my husband.  In January Bill got a pacemaker and went on a range of drugs to regulate his heart rate.  His heart is healthy (other than the fact that it beats too fast without intervention) so we are fine but this put things back a bit.  On April Fool’s Day he had rather extensive surgery on his shoulder.  The surgery was to correct some long term damage that had gotten so bad as to prevent many activities that he enjoys and to allow him to sleep without pain.  We slipped a trip to Guatemala and Costa Rica in between the two surgeries.  He has turned in his resignation to the surgery of the month club!  One point for retiring sooner rather than later. 

Money:  We are spending a little more than I planned.  We replaced a car earlier than expected (needed one with automatic transmission for the bad shoulder), are doing more to the house than planned (when you have more time to arrange for workers to come in, you do more), and spending a bit more on travel than I budgeted.  Again, not a big deal, as my spending plan was very conservative in relationship to how much money we have.    I’d say this is a wash on the “should we have retired sooner or later” spectrum.  We have enough and can always cut back later if needed.  The health issues tell me to enjoy what we can while we can.  And making repairs to the house will matter if we stay or should we decide to sell.

Scheduling:  I’m struggling with this.   I feel like a kid trying to catch up on all of the things I didn’t have time to do.   Spanish classes on Fridays, volunteering on Tuesday, day trips with friends, plays to see, weaving classes, visits to children and grandchildren, getting into bicycling shape, expanding the flower beds, trips to Central America and Washington (the state).   It is fun to be spontaneous but we also fear that if we don’t plan, we find ourselves sitting around.  Someone told me recently that her parents were bored in retirement.  I can’t imagine.  This is definitely is one for retiring earlier.  So much to do!

Adjusting to each other:  We haven’t spent this much time together … ummm … ever.  Bill and I have always travelled well together so I’m a little surprised that we seem to be going through an adjustment period for the full time together routine.  How many baseball games can one person watch?  Your stuff lying around is clutter and mine are projects!  I’m happy to report that this is sorting itself out.   Not sure this relates to the decision as to when to retire – so neutral. 

Work Place Issues:  Workplaces change.  My work had grown tedious.  A relatively new administration was less willing to trust their staff.  Finding new work in your 60s is not easy.  My colleagues left behind report an even more toxic atmosphere.  I truly believe that everyone, even those who love their jobs and are great at them should prepare for financial independence.  Things change.  But even with all of that, a certain part of my identity related to my work.  If you’ve worked many years at something, you’ve developed a certain expertise that gives a sense of worth.  Still the balance in my case is definitely toward earlier rather than later retirement. 

Looks like it was time to take the plunge.  I’m going to bring the laundry in and head to the Irish Fest where my 88 year old German heritage mother is expected to be crowned a co-queen of the festival!  Talk to you later. 

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Spend less and save more – a book review of “the hard times guide to retirement security” by Mark Miller

Real  estate shows on the Home and Garden Network drive me nuts.  You know the shows – a first time home buyer viewing a series of starter homes, or someone trying to find a buyer for the McMansion that they now need to sell.  I always want to know when the segment was filmed.  Is this person buying a house before the real estate bubble burst, during the meltdown, or just after? Of course the network wants to rerun the shows for years so they don’t identify the date.  But how can we tell if the strategy being suggested by the helpful agent makes sense now?   I sometimes feel the same way reading retirement advice books.   Are they writing for a time that is past?  Does this advice still make sense after the Great Recession?

Mark Miller’s book, the hard times guide to retirement security: practical strategies for money, work, and living was published in 2010 and uses its 209 pages to answer questions about what we should do now.  He focuses a lot on working longer, spending less, and saving more.  That part, I could have figured out on my own.  Is there anyone out there who hasn’t figured out that if your retirement savings have taken a big hit, you should adjust your spending and withdraw less than you had planned until your savings recover? 

Working longer if possible seems equally as obvious,  but Miller explains how working a couple of extra years gives a double result.  You will continue to earn and contribute to retirement accounts for those extra years and you won’t be drawing on your savings.  To his credit, he recognizes the difficulties that some older workers may have keeping their jobs and getting hired in a tight job market.  He provides some simple ideas to help improve your chances of getting an interview, and hopefully a job.  Another suggestion is to start a lifestyle business, essentially a small solo business that will bring in some income but be more flexible than most jobs.  

The chapter on income annuities was helpful.  In many ways, an income annuity is a self financed defined benefit pension.  You give the insurance company a hunk of your savings and the annuity provides a regular income that can be counted on until death.  There are all kinds of annuities, some of which are totally inappropriate for this purpose.  It can get confusing.  Miller’s chapter was a good introduction, clearly explaining the basics and how to avoid some of the risks, like a company that doesn’t survive as long as you do.  I still don’t know if it is right for me but this chapter helped me to understand the issues.

This is a breezy little book that touches on quite a few topics, some in more depth than others. It is easy to read, reflecting Miller’s many years writing about aging and retirement issues.  Some of the more timely chapters are “Coping with Post-Bubble Real Estate” and “Resuscitating the 401(k)”.  You’ll get a good introduction to any of the topics covered.  He has a section on lifestyle issues and great web links as well as lists of other publications for more in-depth information.  Miller also publishes an extensive web site on retirement issues, RetirementRevised.com .

You may not keep this book on your shelf for years but it provides a nice overview of the retirement issues of our time.  I’d definitely recommend reading a copy from the library and then buying one if you think it fills your needs.

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I’m not dead!

“I’m still alive,” Mom tells me on one of our morning phone calls. 

“I’m not worried about you dying Mom,” I respond.  “If you are dead there is nothing I can do about it.  I’m more worried about you lying on the floor needing help.” 

Mom laughs.  Good, I don’t want her to feel that we are somehow suggesting that she can’t take care of herself.  She’s obviously quite capable. 

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My sister and I take turns calling our 83 year old mother each morning.  Because it is easy to forget whose turn it is, we decided to trade off by months rather than daily.  We discussed this idea with Mom for a couple of years before we implemented it.  She is obviously ambivalent about the plan.

Mom lives alone in her own home.  Her yard is immaculate and she mows her own yard.  When a neighbor suggested that she should have her children or grandchildren mow the lawn, she snapped back that she wanted to do it!  If she gets bored she strips wallpaper in a room that is starting to look a little worn, hires wall repairs, and then paints the room.  She tells me that she is thinking that she should stop painting ceilings. 

Mom volunteers one day a week at the Ronald McDonald house and another day at her church’s food pantry.  She travels with friends though she has quit driving cross country alone to visit her son 10 hours away.  If she can’t find someone to drive with her, she flies these days.

But Mom does have a range of health problems.  She would tell you that they are all minor and I suppose they are … unless they get worse.  So we call each morning to make sure everything is ok. 

Mom seems to think that my calls are a burden but I enjoy them.  Some days it is just a quick good morning as I rush out the door.  Other mornings we chat for a bit about the weather or what we are up to.  It’s nice to have that regular short contact with her. 

This is the part of retirement that we don’t so much want to think about.  In our fifties, sixties, and for many of us our seventies, we can expect to be quite active.  Things start to get more difficult in our eighties and for most people in their nineties the ailments begin to add up – Arthritis, macular degeneration, diabetes, heart disease, not to mention the really scary stuff like Alzheimer’s.  Mom has given up political rallies and other events that require her to stand for long periods of time.  As her doctor tells her, “The parts, they do wear out.”   

When do you decide to give up the house for an apartment that will be easier to care for?  Some friends have already done this, choosing to move into living quarters that will work for most, if not all of the rest of their life.  I’m not sure I’ll be ready to give up my garden and deck so soon.  I like the sound of children playing outside.  I even enjoy the less soothing sound of teen agers hanging out in the creek bed behind our yard.  Do I want to live with just mature people around?  How do we support our parents and older friends?  How will we support each other when we get there? 

I don’t have any real answers to these questions but they are things I think about when I contemplate retirement. 

I’m hoping that some of you will join in a conversation about what is working for you in retirement, what you hope to do in retirement, how you plan to afford it, or even why you don’t ever plan to quit work.  I’ll write some about the financial aspects, but I’m particularly interested in the other facets of the non-paycheck life.  Where do you plan to live?  How do spouses handle retiring at different times?  How do you plan to handle health insurance in an early retirement? 

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Early Retiree Health Insurance – Part 2: a discussion with the Kansas State Insurance Commissioner’s office

Like most introverts, I have an aversion to talking with total strangers on the telephone – even when those strangers are at the end of an 800 help line.    However, if I am going to get answers to my questions about retirement, that is what I have to do.  

IMG_2355Yesterday I spoke with a representative of my state insurance commissioner’s office and someone at the company that handles my 403B.  Both were incredibly patient and took the time to answer my sometimes awkwardly worded questions.  I’ll get to the 403B questions another day but today I want to write a little more about health insurance. 

If you read my previous post on this question, you know that I’m trying to understand the health insurance options open to early retirees.  Because my husband is older than me, I may want to retire early so that we can enjoy travel and other activities together.  I can calculate living expenses pretty easily but I’ve been having a difficult time figuring what health insurance might cost and how difficult it will be to obtain.   I wanted to know what health insurance options are available to someone between the ages of 55 and 65 and how much I’ll need to save to cover premiums.  I will not be covered by employer health insurance in my retirement.

Since health insurance rates continue to rise faster than inflation and legislative solutions are in flux, I can’t be sure what will happen in the next few years but I can at least understand what the options would be today. 

In the past week, I’ve spent some time on AARP’s web site and on the web site of the Kansas Insurance Commissioner.  Both have good information about insurance options.  I also reviewed a great post on buying health insurance by J.D. at Get Rich Slowly.  Today I want to focus on what I learned at the Kansas Insurance Commissioner’s web site and after talking with Steve at the Commissioner’s office.

Caveat 1:  The states have very different laws and options in relation to insurance.  Check with your own state’s insurance office to learn what is available in your state.

Caveat 2:  I am not an expert.  Check out what I’m telling you with reliable sources and respectfully let me know if I’ve misstated something or made an error.  I’ll do my best to post corrections.

Here’s what I learned:

  • The state of Kansas provides a list of insurance companies that offer individual major medical health insurance plans in the state.  Steve in the commissioner’s office told me that they recommend that an individual check with several companies.  You are likely to get a range of responses with some companies charging substantially higher than others and some offering policies that exempt pre-existing conditions such as hypertension.  But just because one company won’t cover a pre-existing condition doesn’t mean that another one won’t. He told me that in most cases, you can find a less expensive policy this way without turning to the state’s high risk pool.
  • If you are turned down by at least two companies or are only offered policies more expensive than the state’s high risk pool policies, you can qualify for health insurance via the Kansas Health Insurance Association (KHIA).  There is a fairly clear explanation of what is involved in qualifying for this last resort insurance on the web site.  It is expensive and many people cannot afford it.  Steve recommends that you continue to look for a less expensive policy even while you are on this insurance. 
  • I asked Steve what happens if you are offered only policies that exempt pre-existing conditions.  In that case, you would also qualify for the Kansas Health Insurance Association policies. 
  • I also wondered if there was enough money for everyone who qualified for the high risk policies.  Was there a waiting list or other postponement that kept people from getting these policies even when they qualified?  He told me that there was no waiting list in Kansas.  If you qualify and you can pay the premiums, you can get a policy.  I’m curious to hear from readers if this is the case in their states.
  •  The price of the KHIA policies are based on age, sex, and smoking status.  You can get a lower premium if you choose a higher deductible. 
  • For a non-smoking 64 year old female with a $2500 deductible,  the premium would be $757.27  This gives me an idea of worse case scenarios for buying health insurance in my state.  For a five year early retirement, I would expect to need to have saved at least $50,000 for health insurance.  That’s a worse case scenario and hardly ideal but at least I know what the situation is. 
  • I am still unsure what happens if you buy an individual policy and later develop a medical condition.  Your employer provided health insurance can’t throw you out, but they do often raise premiums for employers that have a lot of claims.  What happens with individual policies?  I’ll look a little more into this for next time. 

I have not researched the insurance situation in other states and am interested to hear from readers about health insurance options in other states.  Has anyone bought health insurance as an individual between the ages of 50 and 64?  How did it go?  What were the problems?   I recommend contacting your state insurance commissioner’s office.  Read what is on the web site first and write down your questions.  Mine was not only willing, but eager to answer my questions.

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