Year End Financial Clean Up

By Ivy

This recently came up on the open thread. What kind of year-end financial clean up do you do or plan to do? One poster said that she spends an hour going through monthly charges and negotiating discounts and cancelling unused subscriptions. Is it rebalancing your portfolio? Doing a health check on your accounts? Making year-end charitable contributions? Resetting your tax plan for the following year?

DH & I sit down each holiday break and go through our budget to make sure we are still aligned. We go through our accounts and auto transactions to agree on any changes (e.g., decreasing the 529 savings and upping the mortgage prepayment). We also think about big spending items for the year – vacations, large house projects, etc and talk through priorities. This year I want to add going through negotiating discounts on any monthly charges past their teaser rates and trying to negotiate or cancel. (WSJ – I’m looking at you.)

Here’s an article with a few thoughts about cutting the monthly spend.
https://www.cnbc.com/2020/04/16/5-ways-you-can-lower-monthly-costs-if-youre-struggling-financially.html

156 thoughts on “Year End Financial Clean Up

  1. Thanks for posting this.

    I always start the year out thinking “let’s knock off credit card use and just pay as we go.” But there are perks to using credit, whether points, a $ reward for using the card. So for 2021 I am planning to adopt the ‘charge and transfer approach’. Buy gas on Amex (5% rebate) and then transfer the money from checking to Amex that day (or at least soon). Some will say that’s too much hassle, just pay the card when it comes in. For me I think having a close to zero credit card bill show up in my email will spark joy. We’ll see how it goes.

    One thing I read over the weekend which I think is good advice for anyone is to be specific in your goals and look for positive vs negative and also to start small. “Spend less” is too nebulous. But “buy coffee out only 3 days/week” is specific, concrete, actionable. “Save more” likewise. “transfer the saved coffee $ to savings” is specific. So is “set up an automatic transfer from savings to checking of $10 every Friday”.

    We are committed to getting new windows this year. Having a contractor come measure and give me a quote later this week. Expecting $20k and we’re (DW & I) are in alignment on getting this done this spring.

    Ivy, is pre-funding your mortgage just a comfort “I want less debt” thing? I’m thinking your rate is at a wonderfully low rate so investing what you’d put toward the mortgage might be the better pure financial play.

  2. “set up an automatic transfer from savings to checking of $10 every Friday”.
    should be checking ==> savings.

    time for more coffee

  3. Most years I’m more focused on planning; this year I’m still in Blursday mode, so I spent my mini-break binging shows with DD, watching football, playing games on my phone, and drawing/tweaking the pattern for the sidelights.

    We did end-of-year contributions, plus I had to re-submit my 2019 FSA documentation (which previously was somehow not received) by the 12/31 deadline. We — meaning DH — did a quick tax check to make sure we withheld the right amount from my year-end distribution. Then last night DH updated Quicken and the retirement planning spreadsheet.

    My gift to myself this year is actually NOT sweating the small stuff. Like, the price difference and tips with Instacart bug me, and I always think I could save myself $30 or so just by shopping myself. But for the past 6 months or so, I am looking at that as a $30 gift to myself for the privilege of not shopping + contribution to keeping someone else employed. Same with Netflix/Prime video/Disney+ and now HBO Max: at some point, I am going to go through and figure out which of those to drop. But for now, I am giving myself the gift of not having to deal with that and just enjoying the massive excess of streamable crap while I still can’t do much else.

  4. Subscriptions…we don’t have many outside the things that are now part of living the modern life (i.e. cable TV, gas, electric, water, internet, phone, auto/home/umbrella/health/life/disability/LTC insurances, microsoft 365) even though one could view some as optional like the sports package within cable and certainly there are ways to economize within. But I’ve looked at ’em all and decided we are where we should be.

    We do have a couple of magazines, snow-plowing, lawn fertilizing (but not mowing), Netflix, AAA, local theater, the local newspaper Th-Sun, exterminator/pest control spray 3x/yr, my gym membership that we could just say no to. But none we don’t use.

    Together they all make for a substantial enough nut, but the income is there to support it.

  5. LfB, I still do my own shopping, but there is value in that $30. I saved my returns for today so I was in Target, Nordstrom, and Shop Rite. The stores were empty, and almost a pleasure. I say “almost” because I saw people in each store that did not wear a mask. I think this is the first time since March that I experienced a no mask vs. under nose/chin mask around here. Two people were older folks. One was a pregnant woman and another took it off to talk on the phone.

    We did some financial clean up in December and we have a bit more to do based on that exercise. I finally consolidated 2 old retirement accounts into an IRA. I have one more that is hanging out there, but I am happy to leave it where it is for now. I actually “found” some deferred comp in that account and it is hard to believe that I am approaching the age that I set when I have to start withdrawing some of the money.

    This year’s major project is estate planning. We are waiting to see what happens in Georgia because there is a possibility that things would change with all sorts of taxes if the democrats win both of the races. Taxes will definitely go up for people like me, but it is possible that SALT will come back. the markets are down today because of the slower roll out of the vaccine, but mainly because the markets are predicting that both seats will go to the democrats.

  6. Rhett – I don’t think it should be illegal, but it should be an opt-in. e.g. you want Norton anti-virus and you’re willing to pay. You should have the option to pay them once for a year of service then you’re cut off or to tick the box that it’s ok to charge you every year on your membership anniversary. Say no to it at your peril.

  7. I apologize if that was too political for a finance thread, but I am not making a personal statement. Just commenting on what is going on with the market today and what might happen in the near future.

  8. Lauren – I think markets are also down today because some people and maybe mutual funds are taking profits. For the mutual funds it’s also part window dressing because they want their 12/31 reporting to show they held lots of X, but now it’s time to pare back. Us? we’re doing nothing.

  9. I’m not sure how many of these strategies would work here, but we are making a couple of changes:
    My son is looking into different phone contracts, to cut that bill.
    Santa gave us money for new phones; the cost difference between here @ the US is enough that we are waiting to buy them there.
    I would love to do something about the storage locker; having a moving company bring it all over would cost about 4x the annual payment.

  10. Auto-renew should be illegal as the default, but permissible as an opt-in (perhaps with an annual reminder notice at time of renewal and where feasible, some sort of sunset trigger if the user is not engaging in the service—if you haven’t accessed Netflix in the past 12 months, subscription is suspended/no longer billed until you reactivate). I am happy to have pest control on auto-renew. :-)

  11. I use YNAB for budgeting. I updated the categories and revised the monthly budget numbers. I forced DH to listen to me for 15 minutes as I explained what I wanted to do and the goals “we” have for the year. DH has no interest in anything financial. He doesn’t even know the pin for his debit card to withdraw cash. I went for a walk with my best friend on New Year’s Day and told her that if I were to die she needs to tell DH that I keep a list of passwords in Google Keep. I should also put all the information in a spreadsheet and save to our home computer.

    I need to go through all of our bills that are on auto-payment and see which ones I should move to our cash back credit card in order to maximize the rewards.

  12. I am ruthless about subscriptions I am not using much. I do my own grocery shopping but most of the other stuff I buy online. That’s where, I make an effort not to buy more stuff. We have done very little take out since the pandemic started. So, though our grocery bills have ballooned, we have cut out all the quick bites and Starbucks cups we would have consumed plus no meals at the office. No work clothes either. Kids activities have also narrowed, which was happening even prior to the pandemic.

  13. Cont’d (my pho was ready—On my way home on subway now)

    I might switch to an electricity provider that is cheaper and uses more sustainable ways to produce electricity. But we hope to move this quarter, so I’ll probably wait until we do.

    We are looking at our internet provider, had spoken with a neighbor about it; he’s currently tied up with the estate of his parents in Bulgaria who died of Covid, so that is on hold for now.

    We are switching from an expat insurance plan to a regular publicly funded one. That means things like fees for my son’s BB team, a masters swim team if I join one, yoga classes, and working out with a trainer/PT (as prevention of bunion/knee issues and for his back) will be covered.

    Things I plan to start spending more on: a monthly subway ticket for transit to/from work, going to concerts, vacations on the continent.

    I mentioned earlier this week that I want to start buying my clothes from local makers (more expensive), markets, and second hand (less expensive). Altogether I have a list of about a dozen things that would be nice to have, and I need summer shoes. Altogether, I spend less on clothing here than I did in Tampa.

    Some of the above are not currently available because of Covid, but that won’t last all year. ;)

  14. “Same with Netflix/Prime video/Disney+ and now HBO Max: at some point, I am going to go through and figure out which of those to drop. ”

    We have all these plus CBS All Access. I figure it’s nice to have many choices at your fingertips and streaming has become a major source of entertainment this year. I figure one saved trip to the movie theater to see Wonder Woman 1984 pays for 6 months of Netflix.

  15. “Ivy, is pre-funding your mortgage just a comfort “I want less debt” thing? I’m thinking your rate is at a wonderfully low rate so investing what you’d put toward the mortgage might be the better pure financial play.”

    Yes – that’s exactly right. We went with a 30-year on the new place because the interest rate was so ridiculously low, and it keeps the monthly obligation down, but I don’t really like the idea of having this mortgage into my 70’s even on paper. But instead of making the payments like it is a 10- or 15-year, we are just going to put a small amount toward the mortgage every month to chip away a little bit and pump the rest into what I call our “Florida Fund” (just a taxable investment account, but calling it that makes it more motivating to save).

    Though I admit, as the balances in my asset accounts go up through years of saving/investing, I am more comfortable with debt in general.

    “Who is with me that auto-renew should be illegal?”

    YES. Also during a “year end clean up” a couple of years ago, I caught a recurring payment that I didn’t remember DH or I singing up for. It turned out to be some sneaky thing from a 10K we ran – there was a recurring charge to join some running site that we had to opt out of, but it was in tiny print & needed to be done from another site or with a phone call or some ridiculousness. So then a year passed, and they had the authorization to charge me another $50 or so. I was irate!!

    I need to look into our phone plans and maybe switching. We were forced to change cable/internet providers from AT&T to Xfinity when we moved due to the availability of high speed at our new address, and now our wireless bill is unbundled and no longer under any contract. I have been happy with AT&T service & reception, but it’s time to research.

  16. You guys are so organized. We do not have a budget, did not have a financial conversation, and are constantly surprised by our tax bill (either + or –).

  17. All of you are more organized than I am about this. I only cancelled a few subscriptions over the weekend when i noticed charges. I may get motivated by your ideas. I agree the cost of grocery curbside/delivery is worth it. My bill is lower and food healthier due to minimal impulse items and easier meal planning.

    2020 was an odd year for me. Large renovation project ate up alot of money, but travel, commuting, and entertainment expenses were down. 2021 will still be tight, but I may actually develop a real budget. Anyone have suggested tools?

  18. I don’t like to budget by category. I find it too fussy, and I don’t really care if we are spending our discretionary money on clothes, gadgets, concert tickets, books, restaurants or booze. I only care that we are saving to our goals.

    So with that – DH & I have a discretionary spending goal for each month based on our income less savings goal less fixed expenses less the amount I reserve for “big expenses” like vacations or big house projects, and we track all our spending in a Google sheet. It’s not that big of a deal to update – go shopping, plug a number in a spreadsheet. We go over sometimes, and sometime we are under, but it’s been working okay. We’ve been doing it this way for years.

  19. The one big thing I forgot about that I did a while ago. Cut down to two credit cards, one of which I don’t use but is kept as backup. I have no store cards. I found this the best tool to keep track of spending and don’t have to review charges from multiple places.

  20. I need to cancel some of the Amazon channels – we’re not watching all of them enough. Maybe I’ll look at the available movies and then figure out which ones to drop. I am hoping that our TV will upgrade its Amazon app so that we can watch HBO Max and not just HBO – they are different for some reason (why?) and so we can only access HBO Max through the Xbox. First world problems!

    I also went through my ‘coupons’ email folder last week and unsubscribed from a bunch of stuff.

    We do our budget roughly monthly (updating with values, etc.) but this reminds me that we should look at the 529 contributions and probably increase those.

  21. In terms of credit cards I called Marriott and AA and said I wasn’t going to pay the annual fee as it was of no use to me this year. They said that was impossible. So I said, cancel the card. And they did. No pushback at all. It seemed very odd considering how much CC companies spend on new customer acquisitions.

    I can only imagine that, for whatever reason, the edict came down from on high that there will be no refunding of the annual fees.

  22. Ivy, you and I are so different! What you described is the way my DH does it: figure out how much you need to save for various reasons, put that away, and then go ahead and spend the rest. Me, my baseline is “what do I actually need to spend,” and then every dollar over that must be scrutinized for the value it brings. So all the little things — Target runs, sunglasses, takeout, etc. — are the things that just killed me for years, because I’d see all this money going out and often couldn’t even remember what we spent it on. Particularly things like takeout, where I’m just being lazy. (The hidden silver lining of the pandemic: allowing me to convert “lazy” to “saving jobs” in my head, LOL).

    QQQQ: depends on how your brain works and how much you like tech. For years I just used a ledger book/notebook with something like 4-6 categories (savings, housing, food, car, entertainment, misc., maybe?). If I were starting from scratch, I’d probably do You Need a Budget, because it allows you to save up for different needs, which is something I enjoy being able to “see.” We just use quicken — we just added all our bank accounts, mortgage, CC, etc., and then just enter the transactions to/from; Quicken can then pull together what you’ve spent in various categories, and you can budget from there. I hear a lot of people like Mint, because they just note things on their phone as they spend them.

    But the really easy way to do it is how Ivy described: figure out how much you need to save every month for everything from retirement (outside of work stuff) to vacation to a new car, have that automatically transferred from your checking account every month, and then spend what’s left without thinking about it.

  23. I’m sorting through a possible error on our Dependent Care Reimbursement account reimbursements right now but we are not detailed budgeters. We discuss major optional expenses, like whether to send DD to private school next year and family trips but not much else.

    In contrast, lots of my friends are Dave Ramsey devotees and I was listening to them discuss a particular store that sells everything (hunting/fishing stuff, hardware, groceries, school supplies, pharmacy, etc.) and how they wind up dividing their receipts from there into a few different categories. I am not interested in classifying the hand sanitizer, chips, worms-for-bait and colored pencils into budget categories and DH and I are aligned in that.

  24. I always start the year out thinking “let’s knock off credit card use and just pay as we go.” But there are perks to using credit, whether points, a $ reward for using the card. So for 2021 I am planning to adopt the ‘charge and transfer approach’. Buy gas on Amex (5% rebate) and then transfer the money from checking to Amex that day (or at least soon). Some will say that’s too much hassle, just pay the card when it comes in. For me I think having a close to zero credit card bill show up in my email will spark joy. We’ll see how it goes.

    I pay all my cards weekly.

  25. @ Louise re store credit cards.

    I have a Home Depot card and a Target card.

    The HD card is useful because they send me 10% off coupons every so often and also stuff bought with it can be returned for up to a year.

    Target garners the 5% discount, free shipping no matter the amount, and eliminates the need for receipts when returning stuff bought on the card.

  26. Minca’s “sunset trigger” on autorenewals is great. I bet we’ve all had the experience of “what? I’m still paying for that?”
    Since people are talking where they are putting $$, I need to figure out where to put some that I hope will be saved away for a very long time, but that I might need access to this year.

  27. I track in a Gsheet that has evolved over time (I started in 2011–it’s interesting to see how things have changed!). So it’s a little clunky, but works for me. I should note that I really love personal finance, tracking, and the psychology of spending. At this point, I have 3 main tabs with the following:

    1. Assets & Goals: Short/mid/long-term goals and progress, plus assets (Including change vs prior month); I update this as a new tab every month or so.

    2. Monthly Budget: 40 categories (didn’t realize we had so many!), half of which are recurring fixed (internet, mortgage, etc.) and “lumpy”—not paid monthly, but want to “smooth” the accounting, e.g., property taxes, car insurance, life insurance. I track if we’re over/under on the variables roughly monthly and also YTD.

    3. Long-term Projections: Assets, savings, mortgage & car debt pay down, and anticipated future expenses (big vacation, new roof, college, replace cars)

    I also have a tab with monthly loan payoff amounts, including how much interest we pay daily. :-) I find this fun… perhaps I should pivot to financial planning!

  28. Anon –
    “might need access to this year” translates to very safe, kinda no downside, things. I’d suggest putting that amount in a savings/money market/perhaps an ultra short bond fund.

    “I hope will be saved for a very long time” take that portion and put it in your diversified stock fund of choice. I happen to prefer VTI (total stock market etf). The mutual fund version is VTSMX or VTSAX depending on how much you are investing.

  29. We’re with the non-budgeter crowd. We realized we needed to do something last summer so we met with a financial planner. That helped us a lot at the macro level as far as retirement and college and if we could afford to try to have DW go on LTD. We’re still working on the micro level. I use Moneydance instead of Quicken. It works really well and does everything I need it to do, which is to track all of our expenditures to the penny, and track all the various accounts. We paid off the Outback last month so that’s $630 a month extra we have now to put towards college.

    I look at the recurring charges and such periodically, usually when I see them hit and think “why are we paying this much for this?” But I don’t attack them in an organized fashion.

  30. I use my CC for everything unless there is a penalty/upcharge for doing so because the rewards are worthwhile. I have two cashback cards – an AmEx used for groceries and things where there was a special AmEx reward, and one for everything else. I also have a couple of store CC’s where the rewards are worthwhile. Paying the bills once a month also lets me know if we have cheated on our “budget” – if I have to take money out of savings to pay them off, we went over.

    @LfB – I find it so much easier to define our savings goals first. It feels more positive. And I hate worrying about every expense. But if we get to the end of the month & I see that we are close to our budget, I can pull back on frivolous stuff.

  31. Fred, I mentioned store cards because for some people that can be an untracked money pit.
    I am surprised the article didn’t mention credit cards. In most personal finance articles, that is the #1 item mentioned. I don’t do detailed budgeting but on a macro level, I have adopted strategies to save and keep spending in check.

  32. DH keeps a spreadsheet. Basically everyone I know who works in finance has a spreadsheet of some sort. The spreadsheet goes out for years. So if we keep our monthly expenses the same, I could tell you much will be in our vacation bucket. in January 2026. I honestly never look at the spreadsheet, but DH is always tinkering around in it, updating expenses, and then telling me why a heliskiing trip in 2022 is financially doable.

    I, like LfB, have issues with spending, and looking at a statement and seeing $118.76 at Target, $43.21 at Holiday gas, $12.89 at Chipotle, etc. gives me anxiety. I hate reviewing credit card and banking account statements.

  33. Our budget is an excel sheet. It has a lot of neat things that DH built into it – liquid amount, “liquidish”, 10-year projection of net worth, income-producing assets, assets/liabilities/net worth, savings/investment rate, etc. We also build in each year’s retirement contributions, etc., so we are expecting and reminded to make those in January each year.

  34. “DH is always tinkering around in it, updating expenses, and then telling me why a heliskiing trip in 2022 is financially doable.”

    Ha! Sounds like me. I guess I am in the right profession.

  35. We’re also not budgeters. Which is weird because I am one of the women here who worries about eating cat food when I’m retired. We started working with a financial planner a couple of years ago and she’s still working on friendly-encouraging more budgeting behavior. But we save a ton and her other “issue” with us is that we tend to build up cash and then be over-weighted…so it’s something we’re still working on. It’s a little like Ivy’s approach, it’s just a tad less strategic. We have certain checks deposited certain places and then try not to pay anything out of certain accounts.

    Last year, she wanted us to refi and pull money out for long-term investment because rates are low and we’re getting close to having our mortgage paid off. I’m waffling, because I like the security of knowing it’s paid off, but I also understand the math. And she’s right. Work got busy and I didn’t do it, but I need to decide what I want to do. And btw, DH believes he’ll die long before me (unless I get hit by a bus because lupus/transplant/etc etc) so has completely left that to my comfort level. To Ivy’s point, I would only do a 15 year because I don’t want it amortizing out beyond my mid-60s.

    I watch taxes with one eye, mostly since I had to pay a penalty for underwitholding a couple of years ago (a few hundred…enough that made me feel really stupid). But 2020 was such a weird year, our pay was temporarily reduced, that who knows what it will look like. I just pretended nothing changed, and I’m thinking I should be okay because our income went down. Maybe. i don’t exactly recall if my bonus was different in 2020 than in 2019. It’s all stuck in the Before Times and has kinda mushed together.

  36. We have a spreadsheet that sounds a lot like L’s. We sat down and updated it all the other night, reallocated some investments, put more in the college funds, etc. We hadn’t checked our net worth for a year so I was pleased to see we’d reached a big-to-us financial milestone, but also kind of horrified to see firsthand how *good* the pandemic has been for us financially. I know it’s been very much a case of the rich getting richer, and the poor suffering more than ever.

    We need to up our charitable giving.

  37. DH also created his own spreadsheet with various projections of retirement scenarios depending on who retires when and how much we save per year — we did a “bucket” analysis estimating income needs for various periods of time, which creates a target investment number for retirement, and then various scenarios for retiring at different time. Every year he updates that with the past year’s actual numbers, and the number he always reports to me is what our annual income would be if we both quit today.

  38. Last year, she wanted us to refi and pull money out for long-term investment because rates are low and we’re getting close to having our mortgage paid off.

    In terms of a diversified portfolio, wouldn’t a paid off house function like a bond that pays imputed interest? If your portfolio is 70/30 stocks and bond and the theory was take out $300k to invest. Wouldn’t that be the same as going 100% into equities in terms of overall diversification?

  39. I need to do what L did and unsubscribe from emails. I get so many emails that I automatically delete, or get diverted to “coupon” categories. I never actually go through them or get an email and think “I should get Noodles for lunch”. Mentally I hang onto them thinking I’ll go eventually and want to save $2.00. The digital clutter is getting to me. I need to Marie Kondo my email.

  40. I swear half the reason I try to buy from Amazon is wanting to avoid another barrage of e-mails if I buy from a new seller.

  41. Amex was very smart about trying to retain credit card customers this year. Even though we couldn’t use any of our travel benefits, they piled on lots of other benefits so that we still got more value out of the card than we paid for the fees. We just read that there is yet another incentive for 2021 when we will get $30 credits for using PayPal once a month. I think our Chase Sapphire card did some perks too including a credit for fitness subscriptions.

    I am also surprised about Marriott and AA. Marriott is usually Chase unless you get Amex, and Chase generally wants to retain their customers. Citi is the same with AA. You are correct that they spend a small fortune to make sure that you carry one of their cards in your wallet so I am surprised that they wouldn’t try to retain you via other benefits that are valuable to you.

  42. “whether to send DD to private school next year”

    !!!!!!

    I’m surprised that you are considering that. I’m curious why; please share as much as you feel comfortable.

  43. “Quicken can then pull together what you’ve spent in various categories, and you can budget from there. I hear a lot of people like Mint, because they just note things on their phone as they spend them.”

    Quicken has an app, although I don’t use if so I don’t know its capabilities.

    We’ve been using Quicken since the early 90s, about when we got married, so it’s a record of our life together. E.g., if we forget when we took a trip, we can search Quicken for the hotel charges.

  44. What age are most people here targeting for retirement ?
    I don’t have a good estimate, because in the home country, people are forced to retire by around 60. For my parents generation, it proved to be too soon. They could have easily continued working till 65-70.

  45. Finn, her private kindergarten is open and public schools have been fully remote since last March, which is suboptimal for 5 and 6 year olds. It is unclear if public schools will open regular schedule next year and if they do, she would be with first grade peers who never attended kindergarten so it’s unlikely the teacher could cover the regular curriculum. Cost is moderate and the main hassle is transportation around our work schedules. I need to be able to go in to work and don’t want to lean too much on the boys to watch her, since they have their own remote schooling.

  46. I downgraded my AA (Citi) and Delta (Amex) cards to their no annual fee (and fewer benefits) versions early on in the pandemic. Amex refunded the unused time on my membership year on the next statement; Citi refunded it also but it was slower.

    Then I got rid of the no-fee Delta Amex a few months ago, transferring the credit limit to my no-fee Hilton Amex. Having that confers (minimal) status. I am trying to cull out cards that don’t really provide excess value.

    If traveling becomes a thing again I can always re-up for the cards with fees if the net is positive to me, like no-cost checked bags.

  47. “I called Marriott and AA and said I wasn’t going to pay the annual fee as it was of no use to me this year. They said that was impossible. So I said, cancel the card. And they did.”

    Advice I’ve been hearing for travel cards with annual fees is to ask to downgrade to no-fee cards, without the benefits. I think the idea is once you start traveling again, upgrade back to where you were.

  48. We use YNAB. Some of our categories are mid-term savings, and long-term things get automatically shipped to our savings accounts. We do need to revisit some things. Currently, we are expanding our streaming services. I don’t know if we are going to use all of them… we should rethink that.

    We use credit cards for rewards, but 99% of the time, we have budgeted for those expenses. We can pay those off every month (or week) without an issue.

    I need to go through emails and unsubscribe. Gmail shoves them to a folder and I never see them so I never think about them.

    Big things this year will be our addition, and my quest to do a number of things for a milestone birthday. I think a few of them will be super expensive, but my friends have gotten into this and have been finding me groupons or deals for certain things. COVID will also change what I can do, so this may creep into 2022.

  49. “What age are most people here targeting for retirement ?”

    Early 60s, somewhere between 62 and 64. DW is younger, so while she’ll probably retire after me, it’ll be at a younger age, so we can do fun stuff before I get too old for that.

    “kind of horrified to see firsthand how *good* the pandemic has been for us financially.”

    I was reviewing some of our retirement accounts last night, and this phenomenon means more flexibility for us in when we retire. Combined with our experiences with the pandemic, I think we’ll retire earlier than we’d been thinking pre-pandemic.

    “I know it’s been very much a case of the rich getting richer, and the poor suffering more than ever.”

    Yeah, so we’ve been consciously spending more at places like restaurants and the restaurant supply store. If the local governments had done a better job of keeping everyone safe, we’d probably have taken some staycations that would’ve supported the local tourist industry, whose employees have really been hit hard.

  50. Retirement age.

    On my planning spreadsheets I use 67 as the target year for me. We’ll see how accurate that is. It’s only 4yrs from now. On many days during the last quarter I felt like I could just walk away. Starting up today after a quiet 2 weeks I felt re energized, so maybe going till 70 is a thing.

    Except…I don’t know how I’d use all my time. I’ve got some things in the works, but we need to get to a post-pandemic normal so I can see if they are viable, as in do I really like them?, will enough of my time be occupied if I leave a paying job? If I go beyond 67, I’m likely to cut back to 80% time.

    Being at work is not all that taxing, so I might as well keep on keeping on.

  51. Finn,

    I’m surprised they didn’t offer that for an option. In any case from what I can tell you can reapply and get the signup bonus 24 months after the card is canceled. I figure it’s better to wait to need it and if I don’t end up on a project where I’ll be staying at a Marriott until 2022, then I’ll get a 100k point signup bonus. If I need it before then I’ll just get the card without the bonus.

  52. “But we save a ton and her other “issue” with us is that we tend to build up cash and then be over-weighted…”

    Have you considered setting up a regular transfer from your cash account to a brokerage account, and using that to dollar cost average into an index fund?

    As Ron Popeil would say, “set it and forget it.”

    I did something like that when I was young, although index funds didn’t exist back then, so my regular investments went into a growth fund.

  53. Lauren,

    Do you think their theory is that if they agree to waive the annual fee then it will hit the internet and they will be deluged with requests? But if they just say no then a few thousand people cancel and overall it’s better for the bottom line?

  54. “The HD card is useful because they send me 10% off coupons every so often and also stuff bought with it can be returned for up to a year.”

    I did not know that. We have a Lowe’s card because, like the Target Redcard, we get 5% off purchases using that card.

    BTW, the Target Redcard was the first credit card for our kids.

  55. “from what I can tell you can reapply and get the signup bonus 24 months after the card is canceled.”

    Right after I posted my reply, this thought also popped into my head.

    While that would work out well for you, it doesn’t work so well for the CC company, so again I’m puzzled why they didn’t offer you this option to keep your as a cardholder, given the expense typically associated with getting people to sign up for such cards.

  56. What age are most people here targeting for retirement ?

    It’s not really a target, it’s more the longer you work the more regal your retirement lifestyle and the sooner you retire the more modest. There are so many variables.

    If I found myself 67 working at home at a pleasantly stimulating job with ample vacation time – I’m don’t see (at this point) why I’d retire. It’s also entirely possible that my health could take a turn and working really wouldn’t be possible at 57. Yah never know.

  57. “figure out how much you need to save for various reasons, put that away, and then go ahead and spend the rest.”

    Count me in that school as well.

    When I first got out of college, I set up payroll deductions to my credit union, covering my car loan payment as well as money for savings; to my mutual fund company; and my ESPP. When my employer offered us a 401k, I contributed to my limit as well.

    A lot of that changed when we moved and had kids. The savings and mutual fund deductions went away, and our current employers don’t offer ESPP. The money that had been going there was redirected to stuff like daycare and tuition. But we continue to max out our 401k contributions, and on the few occasions when our cash accounts started bulging, we transferred some over to an investment account. We also draw from the cash accounts to fund IRAs.

  58. We are targeting 65, but we could retire if DH loses his job. One issue will be medical care, but I would try to convert from project work to full time if this happens. We are financial types without a spreadsheet or budget software. I used to budget years ago when I had student loans and other debt, but I stopped with a formal budget once I had no debt. I never owned a car, home or anything that required debt until we got married. DH was in a similar place so we were building savings vs worrying about getting rid of debt. We do a semi annual and and annual check up of our assets. There are some years that we have significant losses and then we cut back on our spending. We don’t need a spreadsheet to do this, but we just talk about cutting back on major purchases, delaying home improvements, holding on to a car etc.

    We did look at seriously at our cashflows during the financial crisis. We were about to upgrade our home and we never took that step. As a result, we own this place so that is a significant savings in our monthly expenses. One negative is that this home as not appreciated as much since there is a ceiling based on size and location.

  59. Finn,

    I’m puzzled as well. All I can think is that they feel this is the best way to make their numbers this quarter. If it ends up costing 2x as much in a 18 months well they can deal with it then and keep their jobs in the meantime.

  60. We are targeting 58, with a big fat asterisk, as I strongly suspect DH won’t be ready to walk away entirely at that point, and I’m not sure what I would do with myself if I did. The last 9 months has demonstrated how much my plans depend on being able to travel, and I’m sort of at a loss for what to do when I’m at home and worry my butt would become permanently attached to my recliner. If we could find ways to take a month or two off at a time, that would be ideal, but neither of our jobs really allows for that.

    Then again, I’m at 60% now, so I almost have the best of both worlds, except the not-being-able-to-completely-disconnect issue. I really cannot see myself ever going back to 100%; I have lost interest in climbing the ladder, I no longer need the extra money, and I like my downtime too much.

    I also just realized that this year is going to be our 25th anniversary. In normal times, we’d be planning a big trip (I’ve always had 3 weeks in New Zealand in my head for the 25th, while DH desperately wants to go to Japan). But now we can’t travel, and even if we can by summertime, our summer will involve my mom’s 75th birthday trip to France — and then next summer probably the safari that was canceled last year due to Covid and cancer. Dammit. Not that I’m whining about fancy travel . . . but I’m whining about fancy travel. ;-)

  61. “I don’t know how I’d use all my time.”

    Based on my time off the past couple weeks, this will not be a problem for me. It’s so easy to see days just slip by. Spend some time reading, especially online stuff that can take you down rabbit holes; watch some TV shows, a movie, or a game; take a nap; exercise; and do some regular chores, like laundry, bills, cooking, and dishes, and that could easily be an entire day.

    And that doesn’t even account shopping trips at a relaxed pace (I can easily spend a lot of time at Lowe’s or HD just looking around) that I look forward to once the pandemic is over.

    Throw in actual home projects, travel (and all the associated planning), and possible volunteer work, and I don’t see myself being bored.

  62. Finn — that’s actually my problem: I find it TOO easy to putter the day away doing nothing. I know from past experience that I am not happy if I am not exercising my brain on a regular basis, and yet I have an extremely high tolerance for sloth. So my worry is that I would just spend the day puttering aimlessly and watching TV and the depression would come back.

    I do have the stained glass, and DH has his woodwork. But we are rapidly approaching the stage where we’d need a new, bigger house if we wanted to make anything else. ;-)

  63. We are saving with a goal of being able to retire at 55. Like Rhett said – whether we do or don’t retire that early depends on a lot of things – if our retirement lifestyle wants have increased, what time of fortune or misfortune comes our way in the next 10 years, where DS goes to college, etc. It’s a loose goal, but a very motivating one when thinking about setting savings goals.

  64. Fred, Target let me return things without a receipt all the time, as long as I could tell them which (non-Target) card I used to buy it. Getting used to not having that option was an awkward adjustment when we moved here.

    Laura’s 12:14 post sounds very much like the reasoning of some friends for having a budget—it actually lets them relax about what they’re spending, as long as the total of that lagniappe is less than the amount budgeted.

    WCE’s “ I am not interested in classifying the hand sanitizer, chips, worms-for-bait and colored pencils into budget categories” made me giggle and reminded me of two things:
    My husband, who definitely wanted to divide up receipts
    My trainer, who constantly hammers away on the need to use workouts and diets that you can and will use over the long run. On weight loss, I disagree with her—don’t see any problem going hard for a few weeks and then slacking off, as long as you don’t Yo-Yo back up. But budgeting only makes sense if you do it all the time. I wonder how long the interest in worms for bait vs gummy worms will last.

    Rhett, will they give you a new member bonus when you sign back up?

    Lauren, for a while you were the queen of point schemes, seemed to know all of them for all the credit cards and which one was best when. Do you still?

  65. LfB – I can’t see myself going to 100% time at any point. Since I made partner I work a bit more on Fridays than I used to, but that’s mostly limited to just making sure nobody needs me. Our comp isn’t time based at all, so my efficiency now pays off!

  66. “But we are rapidly approaching the stage where we’d need a new, bigger house if we wanted to make anything else. ;-)”

    Well, you know where there is a house that could keep you busy with projects.

  67. I’m another financial type that does not use budget software. A couple of years ago I migrated our check register to excel. I found that to be really helpful in terms of tracking expenses. We have two main credit cards. Gas and food go on one card (because of the points bonus) and everything else goes on the other card.

    DH and I updated our wills las fall, and as part of that we finally compiled both our IRA’s and 401k’s on one page. I was pleasantly surprised. Our tentative plan is to retire when DH is 67 and I’m 65. I’d like to retire earlier but we need to figure out healthcare. We had to go on DH’s insurance when my severance ran out. The cost tripled compared to what we were paying at my former company. Like Fred, I don’t mind working, providing I have a generous amount of vacation. I’ve been spoiled with my last couple of jobs (5 weeks at both places). DH has said he’d like to scale back as opposed to retiring completely.

  68. Rhett, sorry—I see the CC question has already been discussed.

    Laura, France next summer with your mom, then the anniversary trip to New Zealand, where it will be summer time, with a brief stopover in Japan where it will be too cold to stay long, during the N Hemisphere winter. The safari is the following summer. Doesn’t sound bad, now does it? Lmk if you take a side trip to Berlin during the France blowout.

  69. Ivy, what phone carriers are you considering?

    I’ll need to get a plan when I retire– currently, the phone I use if employer-issued.

    DW and DS are on Boost mobile, which has some pretty cheap plans. One thing I really like about their plans is they don’t tack on any other taxes or fees– their $30/month plans cost exactly $30/month. Their plans currently start at $10/month.

    DD is on Mint Mobile, which was the cheapest option when we signed up, but now Boost has a better cheap plan. Mint’s attraction was a lower cost/month if you paid multiple months in advance, so we’re locked in to that plan until summer, but we may switch to Boost at that point if the plans still look like they do now. If you want a lot of 4G/5G data, Mint has a cheap plan.

  70. “Japan where it will be too cold to stay long, during the N Hemisphere winter.”

    There is some great skiing in Japan, so it’s easy to stay a while in winter.

  71. Our retirement goal is between 55-60. Right now we are on track for 58. I see healthcare being the number 1 reason we won’t retire that early, but it is nice to think that if I’m 60 I can walk away. Parents of my friends did something along the lines of retire (sold his business) in his late 50s. Moved to the mountains to ski. He and wife took low level employment for healthcare and the very small income stream was “fun” money until official retirement age.

  72. I plan to retire before DW. During the time before she retires, I’m thinking that I’ll be doing pretty much all the stuff like cooking, grocery shopping, laundry, bill paying, and travel planning, as well as workouts that she wouldn’t do with me anyway, while she’s at work. That would make her time off more available for the fun stuff.

    I’m also going to encourage her to take advantage whenever her employer offers leave without pay, typically on Mondays or Fridays immediately before/after Tuesday or Thursday holidays, to stretch her vacation time.

    LfB, perhaps you could do something similar. And if he’s able to WFH for short periods, e.g., a week or so, you might be able to stretch some of your travel.

  73. S & M, yes!! We kept our Amex platinum and Amex Delta cards. We have to pay fees, but we came out ahead because Amex came up with a lot of creative offers that didn’t involve travel. As long as I break even, I am happy to pay the Amex fee because I am earning miles for future travel AND Amex has very good customer service. I also shop through Rakuten so I often get cash back on top of my credit card points. I get free shipping by using my Delta card membership for Shoprunner.

    I only have two cards that are store branded. One is Target because of the additional 5% discount and generous return policy. This card is free and it saves me money since I like to shop at Target. The other store branded card that I have requires a little more work, but I have figured out the system. That is my Nordstrom Visa. I only got this card a few years ago because I was sick of paying for parking at my mall. I was able to get free parking with the card. I never intended to use the card, but It actually comes with a decent number of benefits. This card has worked out great even though I just use it for Nordstrom and Nordstrom rack. I could use it more since it is a Visa, but I my Chase Sapphire makes more sense when I need a Visa in a store that doesn’t take Amex.

  74. Based on today’s conversation I made some changes to a few recurring bills:

    VerizonWireless: I changed to autopay from checking and also changed plans so my bill will actually be $10 LESS than now. The new plan includes everything we had before and also Hulu, Disney+, ESPN+, 6mo of Apple music, 12 mos of the new Discovery+. DS2 is coming home in a couple of days so I’ll have him sort out all the setups on devices. Had to go with the draw from checking to get the $10/mo off, but that seems like a fair trade.

    Landline Phone (pleeeease, no comments) and cable/internet (different providers): changed to autopay onto our $ back rewards card.

    Gas & Electric Utility…made no changes as they only let autopay pull from checking accounts, with no discount for me letting me do that. Interestingly, if I want to make a one-time payment I can put it on my cc for no additional fees. But I have to do it manually every month. Is it worth it to me to do that and get ~$4 in credit card rewards every month? Seems like a lot of work vs just a one-time sign up lie for Phone and cable/internet.

    oh, and I forgot to mention earlier…finance guy here…no budget unless it’s for a specific thing as in we need $$ by (date) so we can redo the ________ / buy a new (car) / do the family trip. Then I’ll track it. Otherwise we just save as much as we can and make sensible decisions.

  75. Rhett, cool website. It isn’t pertinent to me now, but I hope I’ll remember it when it is.

  76. “Japan where it will be too cold to stay long, during the N Hemisphere winter.”

    Tokyo is at the same latitude as Charlotte NC. A quick googling shows the temps to be almost exactly the same. Personally, I think 50ish is fine weather for walking 10 miles visiting temples, palaces, museums, parks, etc. Things are also cheaper and less crowded vs. spring and summer.

    YMMV prices differ in AK and HI.

  77. Rhett, shhhhh, don’t tell Laura’s husband—he wants the Japan part & she’d rather do New Zealand. I do think it is possible to hit them both on one 2-3 week trip. Question is what % of their time to spend in each.

  78. DH and i were discussing retirement last week. I am kind of in favor of the idea. He is not. There are also a couple things we’d like to buy that preclude retirement for a while. If they came up for sale, I think i would regret not trying for them. I’ve kind of been thinking that getting ready to make a sizeable purchase is basically the same as preparing for retirement, at least financially.

    I just finished the crop budget for the coming year and projections for the next five. I use spreadsheets for the ranch budgets and land payments, but not for personal stuff.

  79. At my workplace, I realized that the higher you are on the corporate ladder, the more the danger of layoffs but there are a bunch of dependable types who make a decent living and chug along quite nicely. They can take off at non peak times to travel, not having to worry about a school calendar. Hopefully, I can manage something like that when the kids head to college.

  80. “We need to up our charitable giving.”

    You don’t necessarily need to do that to do good.

    E.g., you could spend more at businesses that are struggling due to the pandemic, as opposed to giving to food banks that might support those who lose their jobs because they worked at similarly struggling businesses.

    If you’re concerned about climate change, you could spend on things that would reduce your carbon footprint, even if they don’t pay off from a pure dollar standpoint that ignores externalities.

  81. my current spread sheet has been going strong for 10 years – one tab per year. I lost the previous one in a hard drive crash many years ago. I do a monthly rolling cash flow, a year at a time. I needed that originally to make sure I had cash for tuition payments, and DS2 finished up in 2004. Then there was big ticket travel. I look at the coming year, figure out the recurring items, and due dates of any big advance payments or expected large credit card bills after a trip or generational transfers. I then decide where the cash will come from, selling stock, transfers from retirement accounts, etc. Discuss it all with my broker each January. But there were real estate surprises the last couple of years. Now that everyone owns a house, and we are not going for any big trips soon, the plan may not require a lot of tweaking on the fly.

  82. @ Finn – perhaps you can achieve similar results if you go to nearly 100% equities. To me, it’s a similar question – on a slightly bigger scale – than whether or not to pay down my mortgage faster. We’re not, we’re putting more money in the market (just in chunks, not in the yes – I agree, should be – monthly dollar cost averaging). And I wouldn’t re-mortgage more than 50%, that keeps it low enough that I won’t stress over having the debt outstanding. Behavioral economics is fascinating to me. I’m lucky enough to be above average IQ and executive function, and I can see I’m not a rational investor.

  83. Our mortgage is paid off, and we had no other debt, but last year when we needed a lot of cash fast I took a very low interest loan to keep the equity investments in place. I pay the interest quarterly, but this Spring when the rate resets upward a bit I am NOT going to pay it all back. It is less than a home equity rate, and I going to make progress principal payments on an extended schedule. This is not a bad time to operate with some secured leverage.

  84. What do people think it means to be a rational investor? So much of the analysis I see looks at the history of U.S. equities over decades, which isn’t long enough or variable enough to be truly representative of what stocks represent. The U.S. equities market, for a variety of reasons, has been unusually good/stable by global standards for the past ~century and so looking only at U.S. market history underestimates risk, I think.

  85. Interesting article on paying off one’s mortgage early:

    https://www.washingtonpost.com/business/2021/01/04/why-you-shouldnt-pay-off-your-mortgage-if-youre-real-estate-investor/

    My takeaway: with today’s very low interest rates, only pay off your mortgage early if you’ve already paid off all other debt, and have enough of a cushion that you won’t need to borrow money, e.g., to buy a car. Your mortgage is probably the cheapest money you can get (other than marketing type loans, like 0% loans for new cars or furniture, which have their own potential pitfalls).

    We paid off ours early, as opposed to putting that money in college savings accounts. But back then interest rates were a lot higher than now, so even though mortgage interest was more deductible than now, the effective rate of paying it off early was higher. And it was also part of a plan to try and qualify for financial aid, as well as to have it paid off prior to retirement (I subscribe to the Mémé theory of small monthly nut in retirement).

  86. “What do people think it means to be a rational investor?”

    I think it means, at least in part, to try to take advantage as much as possible on whatever information is available, and to be open to new ideas and information.

  87. A couple of you mentioned HBOMAX. My ATT uverse internet is offering it for free, so I was able to convert my existing subscription and save the $15/month. Not huge, but something.

    We also do just a loose budget similar to what others have described. We hope to retire in our early 60s. DH is a few years older than me, so he would retire first. If the new administration lowers the Medicare age to 60, that will increase the likelihood for us. Working from home is pretty flexible and low stress for the financial benefit, so if our respective companies are willing to keep us on we may choose to do so.

  88. I have pretty much decided that I will stop taking new matters at age 58, and will fully wind down my solo law practice by my 60th birthday. This isn’t so much because I’m dying to retire, as just trying to make it more likely than not that I won’t die or become disabled or cognitively impaired before I have fully shut down the business. I have tried to be as organized as I can about writing down “disaster” instructions so that someone could deal with my practice and contact/transition my clients if something happened to me, but it would still be a huge PITA. I worry a lot about this issue, so giving myself a firm “stop” date that is in the not-too-distant future has been helpful.

    I wouldn’t want to stop working completely at 60, though. I totally see myself doing something for pay (even if it is a low-level job) for a long time. I like working. I like having some income coming in. I think working would be particularly fun if I didn’t *have* to do it. A while ago I ran into an old family friend. She used to have a pretty high-level job in a hospital. She’s retired from that job, and now works part-time in a Stonewall Kitchen shop. She loves the store, and the employee discount, and she’s just very happy to have a low-stress job that she knows she can walk away from whenever she wants. I see myself doing something similar.

  89. “I went for a walk with my best friend on New Year’s Day and told her that if I were to die she needs to tell DH that I keep a list of passwords in Google Keep.”

    TCM — I’m also married to a man who has no interest in anything financial. I have all of our papers (estate planning documents, investment info, life insurance info, etc.) in an accordion file that I keep on a shelf. I have taped a sign to the front of that file that says, “If I die, call [name of my friend who works at a trust company], and arrange for this file to be given to her. She will handle everything from there.” Every so often, I remind DH of the existence of this file.

  90. The U.S. equities market, for a variety of reasons, has been unusually good/stable by global standards for the past ~century and so looking only at U.S. market history underestimates risk, I think.

    That’s why you diversify with some VEU global stock ex US.

    Alibaba
    Nestle
    Samsung
    LVMH

    VUE has a large position in ASML Holding N.V. is a Dutch company and currently the largest supplier in the world of photolithography systems for the semiconductor industry. The company manufactures machines for the production of integrated circuits.

    Is that business going anywhere? I don’t know but I bet you and Finn do.

  91. Rhett, I’ll admit that a former engineering lab partner did his dissertation on why ASML is a natural monopoly.

  92. I track our expenses via spreadsheet, and track our investments in some software I learned about from my investment club days, Investment Account Manager. When I followed a link from their latest mailing to their website, it was to a blog post from Jonathan Clements who used to write a Personal Finance column for the WSJ: https://www.investmentaccountmanager.com/products/my-four-goals/ Now it looks like he is editing a financial blog called Humble Dollar https://humbledollar.com/

    We paid off our mortgage last year, with the idea that we would redirect the payments to pay for college. We’re still waiting to see where DS ends up, in the meantime that has given us the flexibility for DH to work at another start up. I could see him working at this one until he retires, which I didn’t think was possible at his prior two positions.

    I’m currently 57 and there are potential retirement dates at ages 60, 62 and 67. There are changes at work that make me think that 60 is more attractive than 67, but we’ll see how things evolve. My grandfather retired with a pension at 50 and then consulted back into his 70’s. One of his last assignments was on Antigua. My father is still practicing law at age 80, although he thinks this may be his final year.

    Prior to the pandemic, we stopped at one of the wine tasting rooms in Santa Ynez and the person who was serving us was a retiree. It might be fun to work at one of the local tasting rooms.

  93. WCE,

    That said you have a healthy skepticism that I share. But I can’t find any better options.

  94. I retired at 62 after a ramp down because I wasnt having fun anymore and I wanted to do things with DH who had retired ten years earlier. 9 mos later had to care for my grandchildren while their mom was in treatment. A couple of years later I did afterschool/back up when she went back to work. The idea of working in a gift shop or at a winery to get out of the house is incomprehensible to me. In my case, EFF U status was too dearly won. Family, pet, and community responsibilities take up a fair amount of my time. Self care, physical activity, intellectual challenge, and managing daily living fill most of the rest.

  95. My county has started taking appointments for 75+ for their extremely limited vaccine doses. Our health systems haven’t said anything yet for 75+. They are still vaccinating healthcare workers. I think the county is doing sign ups, so that vaccine doses don’t end up sitting on the shelf and they can call people as and when spots open up.

  96. I want to have a part 2, but I am not sure what I want to do because I am also part of the EFF U club. The Athleta that is nearby has a lot of employees that are around my age so I thought that I wanted to work there because many of them are former professional types. One of my friends started to work there last year and it sounds like a mixed bag. It is very hard to tell in a pandemic because so much of her work has to do with cleaning. I also don’t love the hours in retail since it isn’t a set schedule and it involves a lot of weekends. One of my close friends that lives in CO was able to secure a new job that involves full time work that will be remote even when the pandemic is over. Another friend in PA was able to do the same an she starts a new job this week with an investment firm.

    Once this time is behind us, I don’t think that I want to spend all of my time in my house. I want to work with a flexible schedule, but I also want to be with people.

  97. We logged into our various 401(k)s and IRAs and our brokerage account yesterday to get a precise total for 1/1/21, which I entered into my Excel spreadsheet. If we were willing to fully rely on the 4% rule, even at today’s high share prices, we could retire now without a significant change to our lifestyle. But we’d need to be careful about the number of VRBO trips we do, and plan more carefully for expenses like the annual boat slip fee. I would also need to figure out the best way to get money out of retirement accounts without too much penalty, and that may not be possible yet.

    Thinking about it as I type, I bet I could really get into the optimization of certain things. I would cook a lot more, for starters (I’m trying to do that now, anyway). I would never hire another painter…but when something breaks plumbing-wise, I tend to require professional help. Anyway, it’s just a thought exercise. And when I start to think about how I would spend my days, it’s either too much money spent on boating, too many brain cells killed on Netflix, or then I start thinking about going back to work.

  98. Random aside from the trenches this morning. I’ve never worked in a holiday destination until this year. I have been at the center of so many ruined holidays over the past few weeks. It’s been taxing – but I am about 45 minutes away from finishing my clinical work before my own 2 week holiday!

  99. Ada, I think some people are grateful when they meet you even if their vacation is ruined. I was sick during one of my trips to Australia. We were on an island for a few days when I got sick and I had to see a doctor. There was a nurse available seven days a week, but the doctor came twice a week by boat. I was very grateful to meet this guy and I am sure that some of your patients feel the same way.

    My UK friends were in WDW when their son got very sick. They were visiting from London and the ER doctor diagnosed a serious disease that was missed by their son’s pediatrician for long time. So, the vacation was ruined, but the ER doctor in Orlando probably saved his life.

  100. Meme/Lauren/Milo, I had an aunt and uncle who expected to do the “work in retirement as a fun way to get out of the house” thing. He retired from a position in the corporate offices of an insurance company and she from the corporate office of a very large national non-profit. Their “fun” jobs were bagger at a grocery store (him) and body care product tester (her). I don’t think that stage lasted more than a couple months. Seems to me the best reason to continue to work part-time after formal retirement would be intellectual stimulation; those jobs clearly don’t provide it (unless you are a teen who works his way up from bagger to manager responsible for opening the store before being old enough for a drivers license). They traveled a little bit after retirement; their trip here in the 90s was their last one, and he was clearly managing her diabetes care then. She eventually died from complications of diabetes. My mother is disgusted that her sister wasn’t more diligent in the daily maintenance that disease requires; I think my aunt made her choice about her own life. Her husband continued Spanish and tango lessons and travel, to Lake Titicaca, Central America, and Argentina, for years after her death. He is now living someplace where he gets care. I believe his mental abilities are faltering, but then again, he is in his mid 90s.

  101. Also, I play bridge at a highly stimulating level. I am still improving my game. Ceiling is near, given my age, but havent bumped my head yet. After Covid clears, the travel and other costs to play to face to face with my friends sons, the young champion pros, against other champion pros and their clients will increase such that it will be a quarterly or bimonthly week long treat, not a regular part of my weekly schedule. But there will be regular warm weather outdoor activities, and cultural performances to occupy my time again and expand my world. Given all the early deaths in my cohort even before Covid, no paid obligations are a way to facilitate Carpe Diem.

  102. Such interesting thoughts on part time work after retirement. I have, for a long time, thought that at some point when the retirement nest egg is sufficient, that will be my EFF U moment – that I can find a job to cash flow me until retirement without need to fund other savings. I think it more likely that I will find “things to do” in the non-profit sphere where I can have the benefit of being around people with the freedom that comes from being there in a non-paying role. (I’m heavily involved in one right now that I could see remaining involved in.)

    I really have adjusted to COVID isolation pretty well. I do think I could retire now and be plenty busy reading, puttering, doing projects and binging shows. And then add travel – whammy, I’m good.

  103. Mémé, just curious– do you think the pandemic will have a lasting impact on your bridge life, e.g., a lot more online competition?

    I’ve read that the demographic of bridge players is trending up in age, so perhaps that might also figure in.

  104. Ada, your post reminds my OD friend whose office is in the heart of a tourist town.

    She didn’t count on much tourist traffic when she did her business plan– hers was (and I think still is) the only practice on that side of the island– but it turned out that she got quite a bit of business from tourists who lost or broke their glasses.

  105. “If we were willing to fully rely on the 4% rule, even at today’s high share prices, we could retire now without a significant change to our lifestyle. But we’d need to be careful about the number of VRBO trips we do, and plan more carefully for expenses like the annual boat slip fee. “

    Have to plan more carefully sounds like a change in lifestyle. But don’t forget that retiring now could mean paying in full for your medical care and insurance.

    OTOH, don’t forget SS and medicare; your various accounts only need to fully fund you until you start collecting SS and enroll in medicare.

    “I would also need to figure out the best way to get money out of retirement accounts without too much penalty, and that may not be possible yet.”

    There’s a way to get money out of IRAs without penalty if they’ve been opened at least 5 years. So anything in other retirement accounts, e.g., 401ks, that can be moved to IRAs could be similarly accessed by moving that money into an IRA.

  106. Finn – In my estimate, I was figuring about $20k annually for health insurance.

    Re: just holding on until SS and Medicare kick in, I’m not sure that makes much of a difference, at least at this age. Funding something for 27 years, and 25 years, is not that different than funding it in perpetuity.

    I was vaguely aware about something with IRAs involving equal periodic payments as a way of early distributions. But, as I said, we’re not actually considering it.

  107. Finn. A lot of elderly bridge players are not interested in online bridge. The game is primarily social for them. Everyday Online bridge is also on a strict clock. As for tournament players, pros and those who hire them, there is no way to compete with assurance of no cheating. So the “wins” are not valued, more like high level scrimmages, and the sponsors dont pay bonuses. For winning the equivalent of a world cup face to face, two weeks work, one mega sponsor gave his pros 100K Euro bonus, each, in addition to their daily fees and all expenses. When the pandemic is over, a lot of local clubs will not reopen. There will be permanent online play for rating points.

  108. Milo, would you ever consider renting your home out in an Air BNB type way, or for a longer period to someone in your area temporarily (or relocating and home-hunting) while you go on an extended sail?

  109. SM – If any of my kids were around, I’d be happy for them to stay here. As for actually renting it, I’d probably only consider it if I could find someone in the military looking for a place to live. I don’t think I would turn it over to the general public.

    If we’re actually renting it, we’d have to move out all our stuff. The other option would be to find a military person who’s doing a geobachelor assignment (family is choosing to stay home rather than move twice in 12 months), and rent it furnished for below market value. It’s half tenant, half caretaker.

    But that also sort of depends on the boat.

    Are we talking a relatively inexpensive, smaller, and more likely candidate?

    Or something that’s better suited to being a full time liveaboard?

  110. That cruise looks much more appealing (to me) than your old QE 2 across the ocean idea!
    s for your kids staying there, I was thinking in terms of you saying you’d have to be more careful about Air BnBs, that renting your house out could make up for that.

  111. Milo,

    How many extra years of work is option #2? Running a very rough calculation at 7% it looks like less than 2 years.

    For the sake or round numbers if someone was 40 and had $2,000,000 and was adding $40k a year at 7% at age 58 they’d have $8.1 million. At 60 they’d have $9.4 million.

  112. Rhett – I hear you. It’s more about the difference between what we buy in the next few years (if anything), and what we buy at 55.

    For a liveaboard, this is probably a more manageable example, that actually has a better master stateroom (because it’s in the back). Smaller and less expensive to maintain. Although this is a very old design that went mostly unchanged for 40 years and has since been retired.

    https://www.yachtworld.com/boats/2007/grand-banks-47-heritage-cl-3650130/

    On the cruise topic, it’s kind of shocking how inexpensive it is. That Princess one I linked goes from the new year through April, and it’s $30k per person, including the alcoholic drink package and all meals of course. For the average Totebag couple living on $150k per year in retirement, they could easily do one of these every year if they wanted to!

  113. For the average Totebag couple living on $150k per year in retirement, they could easily do one of these every year if they wanted to!

    Do two a year and it’s still less than half the price of assisted living.

  114. But for the younger set, compared to all the costs of owning a second home….

    I’m surprised they’re not more popular.

  115. For a couple, it’s cheaper than one year’s tuition for one kid at a HSS! (And I’m talking balcony room.)

  116. I’m surprised they’re not more popular.

    It’s a few grand more than a Q7 or X5. I think the price is a lot to swallow for most people even if they have the money. I also think you tend overestimate how much money UMC retired people have by a considerable amount. So there is that.

  117. “For a couple, it’s cheaper than one year’s tuition for one kid at a HSS!”

    Not quite. DS’ tuition is just under $50k.

    But throw in fees, room, and board, and it is less.

    There are also interior rooms for less than $20k/person.

  118. “if someone was 40 and had $2,000,000 and was adding $40k a year at 7% at age 58 they’d have $8.1 million. At 60 they’d have $9.4 million.”

    $40k isn’t even maxing out 401k and IRA contributions, so well within reach for lots of totebagger couples.

  119. $40k isn’t even maxing out 401k and IRA contributions,

    For those with an AGI below $198k.

  120. It would be interesting to know the percentage of 40 year old couples with an AGI below $198k who are maxing out both all four ROTH IRAs and 401ks (51,000). I’d say the number is below 1%.

  121. Is there an income cutoff for 401k contributions? I’m not aware of any.

    401k contribution limit is $19.5k/year/person, not including employer match. So most couples maxing out their 401k contributions would be over $40k/year without any IRA contributions.

  122. So most couples maxing out their 401k contributions would be over $40k/year without any IRA contributions.

    Assuming a match?

  123. Is there an income cutoff for 401k contributions? I’m not aware of any.

    Three or four projects ago I got caught up in the highly compensated employee 401k rule. IIRC if you make more than $130k and that puts you in the top 20% of employees and those 20% are contributing 2% more of their income than those below 80%, then you’re limited to $6k.

  124. But back to the question at hand. What percentage of 40 year old couples with an AGI below 198k are contributing more than $51k (of their gross income) to all four IRAs and 401ks?

  125. “What percentage of 40 year old couples with an AGI below 198k”

    I thought you wouldn’t consider such couples to be totebaggers.

  126. “I think the price is a lot to swallow for most people even if they have the money. ”

    true, but I also think that there are a lot of people who don’t really appreciate the opportunity costs and carrying costs of the alternative luxuries like a second home, or a big boat, or a new RV. An $800k Florida condo at 7%, plus property taxes and insurance…, they could easily do the four-month cruise instead of spending that same time in Naples or Clearwater.

  127. “An $800k Florida condo at 7%, plus property taxes and insurance…”

    HOA dues could also be significant.

  128. oh yeah, good point, i forgot about that.

    to be fair, so could your excursions on the cruise, but still.

  129. Milo,

    It seems like a marketing problem. The $800,000 Florida demographic just hasn’t thought of it as a possibility. I hadn’t really conceived of it till you mentioned it. But it totally makes sense.

  130. to be fair, so could your excursions on the cruise, but still.

    But keep in mind if your in your $800k place in Del Boca Vista you’re doing things as well. At the very least going out for lunch and dinner a few days a week.

  131. Milo, does someone actually sleep on the floor/bottom bunk?! That is beyond claustrophobic.

  132. That bottom one was mine. With a foam mattress topper, it was comfy, if snug. You’re not appreciating how luxurious that stateroom is compared to crew berthing. Those are two drop-down desks on the right, with lockers above it, and more lockers on the left.

    For the crew, the bunks hinge upward and you get a tray a few inches deep underneath the mattress.

  133. Oh, those aren’t technically berths! You have to roll yourself into it. It really is amazing what they make you do. A good friend of mine was in a sub, and he also played college football (not a tiny guy). He has never shared pictures, but I always figured it was tight. He also says that he didn’t have it that bad because he was on the dive team. He described it as snug.

    I’d take an interior cruise ship cabin for 111 days over one night in a sub.

  134. . You’re not appreciating how luxurious that stateroom is compared to crew berthing.

    Wait! That was first class?

  135. Milo,

    Was all that totally necessary? The Zumwalt has half the crew of an old school destroyer. Obviously, if you half the crew size you double everyone’s personal space. Could the sub have operated at 1/2 the crew size? For a Los Angles class a crew of 65 vs 129?

  136. Milo, what do you mean about hinging and the tray? It looks like the lockers are wood? Do people hang out in their berths, at their desks, or is there somewhere else to spend non-working hours on the ship? My son was looking at military salaries online last night; I’m going to show him your pic.

    On the 4-month cruise instead of a winter home, my mom always said going down to Florida felt like going to camp, and she enjoyed building a social group there. I suppose you’d get to know the other folks on your 4 mo trip pretty well, but then they probably wouldn’t be back next year.

  137. Rhett – it was more like business class. XO and CO had first class.

    The numbers could probably be cut a bit, but I would have needed to do a lot of research and analysis first to determine by how much, and where, and what effects it would have. The problem is that you have to staff it for the extremely rare times that the ship is in some sort of tactical engagement, and in those situations, you want the three best sonar techs, and the three best fire control techs, and so forth. The other 99.9999%, just one will do. And the other consideration is that there’s not a great way to train those three without having nine on board, and two or three on watch all the time, because the typical crew member is doing a four-year tour and then rotating off, statistically likely to separate or do something entirely different. If you could effectively train people ashore in simulators, then send out three or four people only when they’re fully ready, that would help. The same is true for junior officers.

    Another consideration is probably 20 or 30 people, depending, are currently “hot racking.” (Three people from three different watch rotations share two bunks, on the idea that one of the three will always be awake, anyway. For each person you leave ashore, that’s three people who get their own beds. So the first 10 people you eliminate don’t make my bunk any bigger; they just let people have their own. And then there’s maybe a dozen people sleeping in the torpedo room, in between the namesake weapons and cruise missiles (or their training versions). So they would probably move into crew berthing next (although some of them prefer it down there).

    If you were successfully able to eliminate 40% of the crew, it would improve quality of life for sleeping, but it would give you very, very little opportunity for actually making things more spacious.

    Also consider how frequently guests/government contractors are riding along to advise on certain pieces of equipment or software programs. And then on deployment, other government specialists for different missions.

    SM – this is what they look like:

    This picture is not a sub, but the part that holds the mattress hinges upward and your storage is underneath:

    https://qph.fs.quoracdn.net/main-qimg-35bc432c56136a3516423d54392be509

  138. “Do two a year and it’s still less than half the price of assisted living.”
    When my parents were on a Silversea cruise they met an elderly woman who seemed to live on the ship. She went from cruise to cruise. That cruise line had more staff than guests, and every guest had a designated “valet” who assisted with – everything. The valet dressed her. The ship’s doctor cared for her on demand. All meals of course were provided. She was essentially in assisted living, afloat. Not a bad gig for a widow without a lot of family connections.

  139. People sleeping in between the weapons—would that be legal for a private employer? (Not that they have those weapons, but the general conditions). I’ve never heard the term “hot racking”. It sounds like what my dad did for a while in Med school, splitting a bed with a guy in a rooming house, 12 hrs each. Why haven’t simulators been built to train people on land? I imagine people training that way would cook their own food and do their own laundry, reducing the need for those services on the ship (less food to transport, even if the cook staff can’t be reduced)

  140. “Why haven’t simulators been built to train people on land?”

    They had them when I was there 15 years ago, but they weren’t that great. They should be better now, but to rely on that entirely would be an entirely different mindset.

    Would you want to send a 16-year-old on a solo road trip after he did all his driving training on a simulator?

    “It sounds like what my dad did for a while in Med school, splitting a bed with a guy in a rooming house, 12 hrs each.”

    Wow, that is extremely frugal.

  141. Ps. My son says “well yeah, it’s a sub. Of course it’s cramped”. But honestly, I think the inability to get fresh air and sunshine would bother me more than being cramped. My “brothers” in Switzerland told me about their military duty, which is a few weeks a year: you go in an entrance on the side of a mountain, and are in a maze of tunnels for weeks, never seeing the sun. But they say there are really big rooms there.

  142. Milo, my dad had to be extremely frugal in college/Med school. Thanks to the Wisconsin system, his tuition was low. He eventually was an assistant in a chem lab, but besides saving money on rent as described, he also drove a beer truck and a cab, unloaded freight cars, and was a “lab rat” in medical testing.

  143. I wouldn’t want a person on the road who had only been in a simulator, but couldn’t the sub guys get most of their training in a simulator, then rotate into the real thing for a month or two? Don’t the extra bodies ever clog things up? Also, how do people stay in shape?

  144. “But honestly, I think the inability to get fresh air and sunshine would bother me more than being cramped.”

    ITA.

  145. “then rotate into the real thing for a month or two?”

    Because it’s supposed to be a cohesive ship’s crew that works together, not an interchangeable temp agency. This is the thinking that it’s based on, I’m not saying that these ideas are totally impossible.

    The extra bodies definitely clog things up when something is going on, like you’re playing games against other ships. The worst — the absolute worst — was a roughly six-week exercise called prospective commanding officer training. That’s when you take aboard six people who are training to be captains of their own subs, and their instructor. And you play these games against another sub with their own team of six PCOs, and some surface ships and helos and stuff.

    But of course all six (seven, actually) need to be in the control room when this is going on, in ADDITION to the ship’s normal battlestations assignments. And they are all very eager to display how engaged they are in determining the solution and the right course of action, so they’ll all be crowding the same two screens simultaneously, then they’ll all move to another screen. My friend and roomate onboard was this short little guy, like 5’3″, from Notre Dame, and maybe I was the official OOD, and he was the JOOD, (I was a year ahead of him) even though we would turn over the actual driving to the PCOs, we still had to be technically responsible for our own boat. Anyway, I remember he would literally hoist himself up on these guys’ shoulders, almost like crowdsurfing, in a mocking way, pretending to be super interested in what was on the screen. And they didn’t even seem to notice because there were already so many people there.

    It’s hard to relate how funny we found this, because you have to understand the implied sarcasm we shared. But it was funny.

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