Thursday, July 31, 2008

Murphy in the Kitchen

Dave Ramsay is fond of saying that when one doesn't have an emergency fund, Murphy moves into the bedroom. Got that right. Though in my case, Murphy landed in my kitchen. On my stove, to be exact.

There I was, mopping up a spill,lifting up the stovetop to make sure I got it all, when there was a crackling sound, the smell of burning rubber, and then smoke started coming out of the now-defunct LED panel. I know I'm not much of a cook, but this was ridiculous.

Sigh. My emergency fund has been defunct since April.

The repairs to the stove cost $285.

Which brings me to my current whine.

I save pennies. But Murphy brings major dollar expenditures.

I know this is an irrational feeling, but it makes me want to throw in the towel on all the penny-ante scrimping when the big money expenses wipe me out. Somehow, saving a few dollars here and there seems futile in the face of smoking stoves, worn out cars, etc.

Monday, July 28, 2008

Wrapping Up July

After two months of increasing debt, I am back on track.

Sort of.

I reduced my total indebtedness by $1,175.59, which is good.

Of course, last month, I had increased my debt by $1343.88 so I'm not exactly even yet.

And there's the rental that has to be painted in September. And my granddaughter's college tuition. Not to mention that my 23 year old daughter is thinking seriously of entering community college this fall.

But on the positive side, my 33 year old daughter, after a "month-long stay" that started three months ago, is in the process of moving her family out of my home. It's supposed to happen by Friday, and will be worth a whole post of its own!

Friday, July 25, 2008

Moving to the Country

The folks at Gather Little by Little have pulled up stakes and moved to the North Carolina mountains--20 minutes to the nearest interstate, 30 minutes to the nearest town and 15 minutes to the nearest gas station/store. They are not retiring, but planning to work remotely.

I, of course, am more interested in moving as part of a retirement plan.

Many of the books I've read on financially managing retirement have suggested leaving cities and populous states for more remote (and therefore, cheaper) areas.

It is an idea worth considering.

However, for the potential retiree, there are other considerations. A friend of mine and her 72 year old companion of the past thirty years, took a roadtrip last spring, checking out various locations. They were particularly taken with property in West Virginia.

But--there's ALWAYS a but, isn't there?

Like me, her companion has diabetes. The disease has been without complications so far, but the longer he lives, the more likely it is that her companion will face heart, vision, and circulation issues. Therefore, it is important to them to have a medical center within reasonable driving distance. Also like me, as my friend has aged, cultural activities, theatre and books have become more important. Ideally, they would like to live near a four-year college or university. And finally, they want friends, friends with interests in common with them. Whether a small town or living in the country can provide such friends depends a great deal upon the particular area they settle into.

Those are the big issues, but smaller ones exist as well. There is a 15 year age difference between my friend and her companion, so the assumption is she will always be able to drive in the event he is someday unable to do so. But who knows. As any of us age, the chances that we will come to depend upon others or public transportation to get us where we want to go, increase.

My friend and I grew up together in a town of less than 2000 people. She left at age 18 and never looked back. She now reflects upon small towns with affection. I, on the other hand, came back to that small town after graduate school. I lived and worked there for many years before moving to the big city 18 years ago. I was glad to leave, and the idea of going back, even with cheaper housing (in my case, really cheap since I still own a paid-for house in that town!), isn't all that appealing. Neither is moving to any other small town.

The truth is, 18 years in the city has made a happy urban dweller out of me. Having great public transportation relieves me of concern that there will come a time when I shouldn't be driving. I have libraries, stores, theatre and movies all within ten minutes of my home. There is a four year college in my neighborhood, and several others in the metro area including a major university.

For me at least, I'm thinking it unlikely that I will be willing to save the money I undoubtedly could save by moving away from the city. Guess I'll have to find other ways to cut costs during retirement.

Sunday, July 20, 2008

When Your Retirement Date Lands in a Bear Market

James Tzitzouris, an investment analyst with T. Rowe Price has a timely, if rather frightening, article on how to handle the first five years of retirement should one begin in a bear market, like, say, the one we're currently in.

So much for the idea that I can pick a percentage, add to it year by year for inflation, and never again have to check the stock market while I retire in financial bliss, assured that my money will outlive me. Apparently I will never get away from having to pay attention to the financial markets and acting accordingly.

To his credit, Tzitzouris has a number of ideas as to how to approach retirement during a downward spiral, and it is clear that it is most devastating when it occurs at the beginning of one's retirement. Fortunately, this is precisely the time when one is better able to postpone the retirement date, continue to work part-time, or take other steps such as not increasing the percentage taken out each year, to lessen the impact of the bear market.

Since my own retirement is still ten years away, I don't yet have to face retiring in a bear market, but that's the thing about a cyclic market--when I do choose to retire, who knows where in the cycle it will be.

My thanks to Emily Brandon and her excellent blog Planning to Retire for pointing out Tzitzouris' timely article.

Thursday, July 17, 2008

Calculating the Future

I've been a bit lax about posting to my blog lately. I blame my job (since I'm not taking my vacation until October, I wind up covering for a lot of summer vacationers) and my family. At least in theory, my 33-year-old daughter and her family are due to be out of my house by the end of the month--I can't wait!

I plan to post more often in the future, but in the meantime, here's an interesting, if depressing, look at some popular retirement calculators by Andrea Coombs at the Wall Street Journal.

So far, I haven't entered my current numbers into the calculators--too scared by this economy, I guess.