Easy Answers

Poor Anonymous is going to keep cloaked once he/she/it reads this post.

In response to my last post, where I mentioned that my rental house needs a new roof this summer, anonymous perkily commented, " If you can save $1,000 a month, you will have the money in a few months."

Say what? Are we on the same planet?

If I could save $1000 a month, I would be out of debt in the next couple of years.

But it took everything I had to put $1300 against my debt during May--including my car payment and my minimum payments. Whether I can manage that feat again in the next few months remains to be seen.

Let's face it. The roof will have to be financed. I have $318 in what is supposed to be my $1000 baby emergency fund. I'll have, maybe, $500, by the time I have to pay for the roof.

Like the van last December, getting a roof is both necessary and expensive. I will get a deal of sorts because my tenant's father does roofing and my tenant has made no secret that he'd like to buy the house one day. I'll get a deal and Dad will do a good job for his kid. But he won't do it for free, or even for $500.

OK--end of rant.

But please--it doesn't help to tell me that if I'd just save $1000 a month, I'd be OK!!

May 2010 Update

At least on a temporary basis (I fear for later this summer!) the news is good. For the month of May, I reduced my total debt by $1351.68.

This is the best I've done since the first of the year (right after I incurred $6000 worth of debt in December, 2009 for a new-to-me minivan) so I'm feeling good for the moment.

Overall, I've reduced my debt from the first of the year by $4000. I'm worried that a new roof for my rental house will reverse this momentum, but for now, everything is moving in the right, downward direction.

BONDage

Apropos to the comments left on my last post, I have been paying more attention to my 401(k).

For most of my financial life, I've put whatever monies I had available into stock mutual funds, often index funds.

I proudly avoided bond funds and money market funds right up until the end of 2009, by which time it just got too frightening to see the volatility within my retirement resources.

So, I started putting new money into bonds.

Right now, I have about 7% of my money in bonds, but the percentage is on the rise.

Apparently I am not alone in my rush toward bond funds. According to the latest issue of Money magazine (the article is not yet online on their website), there is a current feeding frenzy as investors turn to the safety of bonds.

But Money magazine is sounding the alarm that the 30 year bull market in bonds may well be coming to an end, just at the point that people like me are buying them.

So where does that leave Grace?

Since I'm within 10 years of retirement, and have only 7% of my holdings in bonds, clearly I need to continue buying them. But I'm paying high prices for funds that are likely to go lower in the near future.

One solution is apparently to stick with short-term to intermediate-term bond funds or to look at riskier funds that invest in floating-rate bank loans or municipal bonds.

My real problem is that I don't understand the markets well enough to know exactly what I'm doing. I seem to be 'following the crowd' which is almost always the wrong thing to do when it comes to investing.

I'm going to keep reading and trying to find my way through this morass.

In the meantime, no matter what a couple of my readers say, I am NOT going to be seduced by gold--so far nothing I've read persuades me that those investments are good for the long term.

Playing Ping Pong with My 401(k)

I religiously put $1025 of my pre-tax income into my 401(k) each month. My employer contributes an additional 6%.

As of April 23, 2010, I had $190,000 squirreled away for my sunset years.

Today, I have $169,000.

Welcome to the roller coaster.

Ideally, I should close my eyes, continue the contributions, and see where I stand in 8 years when I plan to retire.

Realistically, I keep peeking! And worrying!

This is, no doubt, a function of my age. If I were in my twenties, thirties, heck--even my forties, I could be more sanguine about the upheavals in the stock market. But this is my immediate future we're playing with. And it's scary!

When the Job Goes Before You Do

There have been times when I've worried about hanging onto my job. But having been with my current employer for the past 20 years, I feel like I'll last, God and my health willing, for another 9. Even if I didn't, I am in a field where I could set up a private practice to bring in income, though not with the health benefits I currently enjoy.

So in spite of the occasional whine, Grace is doing OK, jobwise.

Which is good, because the economic outlook isn't so hot in other fields for those of us who are 60+ years old.

Take Carol, the subject of Liz Pulliam Weston's latest post at MSN Money.

In Weston's view, Carol might as well admit that she's retired because chances are she probably is.

The rest of this very good article talks about making the money last in a retirement that will be longer than expected, with less resources than expected. Carol has an employed husband, good unemployment and health benefits, and a positive attitude.

But it would be nice if ageism didn't figure into her life so prominently. I like to think that someone with my experience or Carol's experience would make them an asset to the next employer.

Sigh. Let's get real. It might but it's a rare employer who is willing to find out--not when they can hire someone younger and less expensive with enough experience.

Sad but true. Another of life's lessons in fairness.

They Went Which'a Way?

Two of my favorite bloggers seem to have dropped out of sight.

Hedonic Adjustment's Bluebird has been known to take periodic sabbaticals, but now even his old entrys are gone. Same with Dog Ate My Finances.

What I really dislike is the snarky note that Blogger puts up, saying "It doesn't look like you have been invited to read this blog." Like it's some disco and I'm standing outside the red carpet.

Then Blogger suggests "If you think this is a mistake, you might want to contact the blog author and request an invitation."

Gee, folks, exactly how do I do that when the e-mail address is on the blog--you know, the one you won't give me access to!

Anyone have an update on either of these blogs? I hate to eliminate them from my blogroll.

Creating a New Path

The Seattle Times profiles Sloan, a 65 year old accountant who has been out of work since mid-2009. She's rather enjoying the lessening of the stress caused by 12 hour workdays with her previous employer but her unemployment will be ending soon and she's worried about her future.

This story hit home because Sloan is just a few years older than myself, has saved about $60,000 less than me, and is also diabetic. She has considerable equity in her home, but she still owes $130,000 on it. I'm guessing she took a 30 year mortgage when she bought her home 16 years ago, so she will be 80 years old before it's paid off. Still, she has no other debt, which puts her ahead of me on the credit card front.

Assuming the author of the article is correct, I was interested to learn that Sloan could get Social Security under her ex-husband's account, and let her own Social Security ride until she turns 70, at which time she would get maximum payments on her own account. If this is true, it makes me regret never marrying (though apparently I would have had to have married and stayed married for ten years for this to work).

The article also highlights an issue for older workers who have the work experience but not the educational credentials--Sloan is called an accountant but she never graduated from college. I'm wondering if this makes her more like a glorified bookkeeper? This was fine so long as she was with one employer, as she was for some 20 years. Yet it makes moving to a different job more difficult for her.

I thought it was smart of her to take courses that would allow her to prepare taxes professionally because that would allow her to earn money on a part-time (or part-year) basis.

I was glad to see that though her financial planner had concerns, he also had plans for Sloan that would lead to a successful, though frugal, retirement.

When Frugality Trumps Neighborliness

I read a lot of other blogs, both financial and not. There are often posts that get me to thinking, such as this one from Betty at Bouncing Back From Bankruptcy on the demise of her higher-priced-but-still-convenient local market.

I always feel badly when local, independent stores go out of business.

And guilty, too.

I'm one of those shoppers who says they support the independents, then goes to the mass marketers in the name of frugality and in search of bargains.

I, too, have a small neighborhood market that I go to only occasionally. If I'm running out of milk, it's easier to walk two blocks to what my kids call "The Chinese Store," (never mind that the owners are actually Korean) even if I do spend $1.50 more for the milk. And if the summer heat demands popsicles, it's much easier to drop into that little store than to get in the car and go off in search of cheaper treats.

But I never do any major shopping there.

So who do I blame if the store is in financial trouble? And to whom will I complain if it goes out of business?

I see this all the time in the bookstore world. I love to go into small, independent bookstores. But when I buy, it's most often from Amazon.com. That helps my pocketbook, but not the local booksellers.

I don't have any answers to these questions.

Just a lot of guilt brought on by frugality.

Is Retirement Inherently Selfish?

Thanks to Syd at Retirement: A Fulltime Job for directing me to Financial Sumurai's post on The Dark Side of Early Retirement.

At age 61, it's too late for Grace to retire early. But some very interesting questions are raised. Is it selfish to retire early? Are those who tout early retirement really covering up for career failures? If it requires super-frugality to retire early and remain there, does volunteerism go by the wayside?

And perhaps most interesting of all--are those who have retire early really as happy as they sound and is their life in retirement as easy as they make it seem?

Reading through the many comments left in response to Financial Sumurai's initial post, it is easy to see that others besides myself question whether the whole concept of retirement is really for us.

Syd addresses this over and over in her blog. Ultimately, she thinks it comes down to temperment.

I have to agree. And we need to be honest with ourselves as to what it will take to keep ourselves satisfied.

Some of us depend upon external stimuli to keep us in the game.

Left to my own devices, I'd happily stay ensconced at home with books and my television set, at least until the Ben & Jerry's ice cream ran out. But I know me. Heck, I got bored when I spent a month at home after my heart surgery.

That's why, even without the financial impetus my debt provides, I'd still work beyond the average retirement age. I see my retirement as requiring volunteer work of some sort just to get me out in the real world. I see the need for a schedule of sorts, even if it is a much lighter one that my work world requires.

When the Village Gets Too Close to Home

Extended families are back in the news--specifically, extended families sharing the same home. Liz Pulliam Weston addresses it in her MSN Money column, Should We Live Like the Waltons? Parade Magazine, in today's Sunday supplement also takes on multigenerational families. (Sorry, there doesn't seem to be a link to the specific Parade article on their website.)

Grace is part of this comeback. My household currently consists of myself, an adult daughter, an adult son-in-law (separated from another of my daughters), and two grandchildren.

What surprises me about the articles so far is that while they acknowledge that the economic crisis has forced our families into one home, they tend to focus on the social issues, not the continuing financial ones.

There is the sense that extended families are practicing economies of scale. Would that it were true, but I suspect that what I'm personally experiencing is not unlike that of many other newly-extended families.

I'm the only consistent wage-earner in my household. The newcomers are contributing, but not nearly enough to cover my increased expenses. Not only are my utility bills like electricity and water increasing, but so are minor expenses like toilet paper, laundry detergent, and deordorant.

Moving in with me is financially advantageous for my daughter. It works for my son-in-law and his children.

For me? Not so much.

Let's face it--when families move in together, it is NOT going to be an economic boon to both sides. Either it's middle aged adults assuming care of their parents or continuing the care of their children into adulthood. One half of the equation needs the financial help and the other half is providing it.

I do see the provision of housing for members of my extended family as currently necessary. I also see it as temporary.

Trust me on this one--Grace's family ain't the Waltons!