medianet

Monday, March 11, 2019

Saver to Spender Transition


I recently saw an article on Moneywatch about a dedicated retirement saver who was having trouble changing to a spender after retiring.  This is understandable: if you spent 40 years saving for retirement, you need to change to a spender after retirement.  Changing behaviour can be difficult.  I experienced this difficulty myself.

How did my spouse and I handle it?  At first, I kept worrying about the money and underspending our budget.  We had always lived on a monthly budget.  To fix my frugal ways, we ran our financial plan including budget by a Financial Planner, who said the plan was good.  For the next year, we spent according to this budget, making sure to spend all the money in the budget.  Then we checked our financial plan and budget with a Planner again, who said we were fine.  Having spent all the money, seen that the budget was fine, and having two checkups, we (I) made the transition from saver to spender.

photo credit: flickr

Disclaimer: this is not professional investment or retirement advice and should be used at your own risk. The author is not a licensed financial advisor. You should not believe everything on the Internet including this blog and should check multiple sources possibly including a professional financial advisor before making decisions.

Tuesday, March 5, 2019

I Don't Like South Florida

Hallandale HS (Not A Prison)


I have come to the conclusion that I don't like south Florida.  Granted, the weather is great in January, February, March and there are nice beaches, but it's not my cup of tea.

  1. Anyone with money lives in a gated community, because of the crime I guess.  You feel confined in your compound if you rent a condo or house.  You have to drive out of your guarded compound to shop, sightsee, eat..
  2. Traffic is bad and the drivers are terrible.  The roads are full of a toxic mixture of elderly drivers, lost tourists, and hotheads weaving in and out.  Texting while driving seems to be the state sport. 
  3. Inequality is everywhere.  You see lots of people sleeping on the streets or struggling to survive along with lots of Rolls Royces, Bentleys, huge yachts, and Ferraris.
  4. Lots of Trump lovers in Florida.  There is a huge billboard on the highway near our rented condo that says "God Bless You President Trump for Making America Great Again!"
  5. No one cares about the environment.  Our condo has no recycling facilities and no one seems to care about littering highways, streets, parking lots.
  6. High schools look like prisons with lots of concrete, no windows, big fences, and cops guarding the entrances due to recent massacres.  They do have big football stadiums - not sure what that has to do with education.
  7. The prime requirements to be a local TV news reporter or anchor is to be female, good looking, slim, and have large artificial breasts.  Feminism seems to have missed this state.
  8. This is the state for weird stuff.  If you don't believe me, follow Florida Man on Twitter, who reports on all the weird stuff happening in Florida.  Most recent tweet "Florida Man Seen Riding Naked on Bicycle Down I-95" , link here.

Friday, February 22, 2019

Charities Punish Me for My Donations


I regularly give to charities: animal protection, hospitals, disease research, universities, PBS, etc. 

To recognize my donations, the charities try to make my life miserable.  I think they do it in the hope of getting more money.


  1. I gave to an environmental charity.  Right after that, they started calling me to "..thank me and talk to me about their mission..".  My wife tells them I am out.  I think she should tell them I am hiking to the Arctic to save Polar Bears.
  2. I give to local hospitals.  They immediately bombard me with solicitations for more contributions and newsletters highlighting the accomplishments of their hospital.
  3. I give to a local arts charity.  They keep phoning asking for more money or asking me to buy tickets to obscure shows that I would never attend.
  4. I gave to my alma mater.  They then asked me to "host" the 40th reunion of my class.  I asked what this entailed.  My job was to raise more money to endow a scholarship at the university by soliciting my old classmates that I have not talked to since my waist size was under 32 inches and I had a full head of hair.  I said no.
Next time I send money, it will be anonymous.

Picture credit: flickr

Thursday, February 21, 2019

I Saved Too Much for Retirement

I don't hear this statement much - "I saved too much for retirement".  However, I am beginning to think this way due to recent experiences.

We followed all the best advice on saving for retirement:

  • Live below your means
  • Save 10% of you income, spend 4% of your savings per year in retirement
  • Use tax deferred retirement plans
  • Invest in a diversified portfolio of low cost index funds or ETFs
  • Have a plan - ensure you can support yourself until you are 95 
  • Be lucky
So when we retired, we basically kept living the same way as when we worked.  We had no worries if we lived until 95 or more.

Then I got to see what life is like for people who live into their 80's.  Very very few people that I see in their late 80's are of sound mind and body.  Rather, your body goes and you cannot get out much.  Your mind goes and you are not yourself anymore.  You become a burden to your family and friends.  The only happy seniors seem to be those who are in a retirement home and like people.  That does not apply to me since I am not really a people person.  Your savings do help with these problems, if you are aware enough to spend money on a retirement home or home help to be less of a burden.  Basically, from what I can see, there is not much quality of life beyond your early 80's, if that.

So my plan is to live an unhealthy lifestyle so I don't live too long and spend more now.  There is no point in living to a ripe old age with plenty of money, losing your mind, and being unhappy.

Monday, February 11, 2019

Airbnb and VRBO Have Got to Go


My wife and I have high standards...for different things.  I want very reliable computers, high rates of return on investments, and reliable cars.  My wife wants a very clean and tidy house with everything in its place.

After two experiences with Airbnb and VRBO places in Florida, we have concluded that they don't measure up to our standards.  The places are owned by people who are making money by renting out their house or condo.  Why don't we like Airbnb and VRBO (and similar sites)?

  1. The photos always make the place look much better than it is.  They were taken when the place looked its best and no one takes pictures of the dark drab hallway with old carpet (see above) or the wornout deck furniture.
  2. The reviews are sparse and don't really tell you much.
  3. Once you are committed, there is no way to back out or get your money back unless it is a complete bust and you paid for extra insurance.
  4. There will be extra fees for things like gate passes, key fobs, cleaning..
  5. If something goes wrong like the Internet goes down, you are on your own to get it fixed.  One time, the owner told me to go the Cable company store, tell them I was her brother, and get them to give me a new cable modem.
  6. You are guaranteed that the rugs are dirty, some of the light bulbs are burned out, the towels and sheets are cheap, the pots and pans were burnt and scratched by previous renters, the mattresses are bad, the TVs are old, the walls are marked and need painting, and the blinds and curtains have seen better days.  Basically, the places are well used and there is no motivation for the owner to keep it up to a high standard unless they are getting bad reviews.
  7. The price is less expensive than a hotel, but not that much less expensive.
Both places we rented in 2015 and 2019 were OK and we enjoyed our time in the sun, but we had to adjust our high standards..

Saturday, February 9, 2019

Baack in the USA


After moving back to Canada a few years ago, we decided to avoid the winter by staying a couple of months in Florida.  It is bringing back memories of our move in 1996 from Ottawa to Dallas.

The weather is great..the shopping is fabulous..lots of roads..every product and service available..restaurants galore..mail delivery on Saturday..cheap gasoline..hundreds of TV channels..convenience..low taxes..lots of beautiful women with plastic surgery..gated communities..

But then there are the other sides of the USA:

Areas you should avoid due to crime..anyone could have a gun..TV news that sounds like we are living the apocalypse..Trump Trump Trump on the news..homeless people living on the streets..billboards..lawyer ads..get rich quick schemes..you have to drive to get anything..little recycling, lots of trash..

It just goes to show you that there is no perfect place to live.  You have to know your priorities and decide accordingly.

photo credit: flickr




Wednesday, February 6, 2019

Collecting Canadian (CPP) and US (SS) Pensions



Now that I am getting to nominal retirement age, I am investigating what pensions I might get from the two countries where I worked - USA and Canada.  I worked about 20 years in the USA and 22 years in Canada.  In summary, it's complicated to determine what you might get.

USA

You go to the US SS website, sign in, and you get estimates of your social security pension.  With my earnings record, the pension looked really good.  Then I found out about the WEP - Windfall Elimination Provision.  This reduces your pension if you did not pay into the system for more than 30 years and you are entitled to another pension, like My Canada Pension Plan.  The place to look for information is at this link and you should do your own calculations.  I think my social security pension will be reduced by 20-50% - bummer!  It would be nice to be more precise but the WEP rule is very complicated and not explained well.

This other table seems to indicate that it is limited to a 50% reduction but the maximum decrease is about $400 per month.  I did my own calculations but this seemed to indicate a higher decrease than $400.  The only thing that is certain is that your SS pension will be decreased.

Update (March 4, 2019): A friend alerted me to a document that says that you are NOT subject to WEP if you are covered by a Totalization treaty like the Canada-USA treaty.  The link is here.  So maybe you will not be penalized.  I would recommend bringing this up with the SS administration if they try to impose WEP when you start collected US SS.  Our experience with SS is that the people are hard working, but not skilled when it comes to dealing with non-standard situations like working in two countries like the USA and Canada.

Canada

You go to this website and you can get estimates of your pension.  CPP is not very generous so the little number shocked me (less than half my nominal SS pension without WEP).  I don't think they will reduce it.  If I still lived in the USA, I could get the Old Age Security Pension at 65.  In Canada, it is often "clawed back", meaning it is taxed at 100% and you don't get anything.  I guess the small amount we paid in (less than US social security deductions aka FICA) had a downside.

Summary

Don't count on a big government pension based on SS and CPP websites if you worked in Canada and USA.  You might want to talk to a SS expert in the USA.  Yes, the system is so complex and hard to navigate that you might need to hire someone to help you.  :-(


photo credit: flickr

Disclaimer: this is not professional investment or retirement advice and should be used at your own risk. The author is not a licensed financial advisor. You should not believe everything on the Internet including this blog and should check multiple sources possibly including a professional financial advisor before making decisions.