It's the last Monday of January 2022, so my tracker tells me I'm 71 months away from retirement. We're on track for DH's January 2024 date, our first hurdle. I always get good pointers from you when I throw out questions and plans, and there's a few tweaks we need to do in the coming months.
- Supplemental life insurance for DH
- Prepaid/ insurance for funeral ( yucky to talk about, but necessary
If you've been reading my post for a while, you know we're attempting to live on just my income for 2022 and 2023. This includes all living expenses, bills, semi regular bills like insurance, taxes, entertainment and travel for DH and myself. There are things we've previously saved for that we'll be spending on, but won't have to come from my paychecks. However, if we can partially cash flow them, we will and leave a bit of the previously saved funds in tact. This includes college tuition, bathroom remodel, patio and back yard, and a few odds and ends home projects on the list. It doesn't include our reconisance trip out east with my youngest, it could, but I'm going to try and belt tighten to cover the expense.
What's going well:
- Our 401k's grew as we hoped
- I will be getting a small raise, so both some back pay, a smidge more each month in take home, and will nominally help my eventual pension benefit
- I continue to save money without commuting costs
- With our daughter off campus, and not being quite so stretched time wise with one fewer job, she's doing more cooking, home meals, so her semester expenses are overall a bit lower than estimated
What's been challenging:
- Many regular costs have increased, gas and electric, groceries, home owners insurance
- DH's business has been slow
- Pup's diet needs have increased costs, but he needs what he needs to keep healthy as an older dog
- The end of December expenses that rolled into January and timing now of monthly bills makes it hard to determine how much to deposit into the cash savings account. I mentioned it will take until April to get back on a timeline where I'm paid early enough in the month to cover the household bills, so until then, we won't be able to "true up" what we intend to save-basically all of DH's take home pay. Were' tracking his take home in a column so that once we can make solid deposits, we'll know what the minimum target is, and how close we are coming to it. We're behind because we have not made any deposits in January, but that is often the case following a three paycheck month. This impact just happens to cross calendar years.
Hi, Sam----I read often, but do not comment often. Can't give advice on life insurance because that depends on some many factors. However, prepaid funerals are a good thing. I don't think this is "yucky" to talk about. It is a fact of life. A prepaid funeral allows a family to make decisions and lock in costs ahead of time, saving the need to make those decisions hastily and without thinking them through. That gives a family peace of mind. I know it did when my mother died. We weren't so lucky when my father died, and those decisions made in the midst of grief were hard. Anther thing about prepaid funerals---if one or both of you have go into a facility (assisted living/nursing home) down the road, those facilities generally like to know that the funeral expenses have been taken care of.
ReplyDeleteI know death is inevitable, and I don't want my kids to have to worry about those details. Neither of us want "fancy" but we want what will give comfort to them.
DeleteI'd say, make a plan for your funeral, & get your wishes in writing & make sure your family understands. But, I haven't really understood pre-paid funerals unless you think what you'd like would be quite expensive. I suppose, to talk a bit more about it: if you pass first, would DH be able to cover the costs? If you & DH passed at the same time, would your kids/siblings (whomever you think would pay) cover it? It would eventually come out of your estate, I guess.
ReplyDeleteTalking it out (ha, commenting, I suppose), I guess if it's something that would give your loved ones peace of mind during a very difficult time, what's the downside? Is it significantly more money to pre-pay vs pay at the time?
I think having your plans written & understood (if nothing else, where they can access this information) is a no brainer.
It seems the big costs are plot, headstone, casket and vault- none of which I want. There's other costs too that I'm probably not even thinking about.
DeleteThe retirement game is an interesting game. We have our plans set, but I am honestly not sure TheHub will ever fully retire. I am sure at some point he will retire from his current job, but he likes working, and I seriously think he will try to find something part time at some point. His choice.
ReplyDeleteThough it is not fun to think about, you really do need to have funeral plans set. We laughed at Dad who even told us not to call a funeral home but to call the cremation services directly, to avoid any funeral home costs. He was pragmatic until the very end!
I think we'll both have some sort of retirement "dabble". I know my field constantly has need of short term project leads that I can pick up on occasion, but those might be more intense than I want. I've thought about substitute teaching perhaps. Your dad sounds very smart. I do know the funeral home did things that helped my MIL besides arranging the cremation services, but what all, I'm not sure.
DeleteI have a couple of things. My mom prepaid for her funeral. The process was not as bleak as one would think. You make an appointment and fill out a questionnaire and tell them what you were thinking you wanted it to be like and they have a matrix that says how much it costs and then they apply for a rider insurance policy to cover the difference between then and when it takes place. My mom is a smart lady.
ReplyDeleteAlso it took me about a year to cover bills at the beginning of the month with the previous month's pay and so you are doing great. Just keep at it.
Right now I am trying to build a savings system like my grandmother. My goal is to have 12 CDs where 1 matures each month with at least 1000 in each before retirement. In addition to my regular savings and retirement savings.
Amy
I wish CDs had any interest value. If you know of a good one please share.
DeleteAs you know, I've prepaid my own funeral, but one of the BEST things about doing this is that there is a telephone number on the front of the contract and that's the only thing my boys will have to do. From there it kicks in the undertaker, the funeral home, the choice of coffin, if you have music you would like - oh and an ad in the paper. Not nice to think about but I remember the sigh of relief from my nephew when I my brother died and I told him all he had to do was call that number and they would walk him through everything. Having the funeral paid for - while important - was probably less important to him than knowing someone would help him through everything!
ReplyDeleteIt's part of that folder you talked about too I bet. Life in. Motion? Detail's like communication are important. I remember my older siblings only wanted obituary in local paper, not the city version. We'll our friends are all over and so we're my parents.
Delete71 months is not long at all! I'm in deep admiration of your planning, Sam, good for you! I've been noticing that our grocery shop is getting more and more expensive lately. Heck, EVERYTHING's more expensive!
ReplyDeleteIt's in understandable number now. When it's five years, I'll really be in planning mode.
DeleteMy grandparents did the prepaid funeral many yeas prior to their deaths. For the family, it made things so much easier as it was all taken care of and decisions were already made as to their wishes (cremation) and where their urns were to be placed. I'm guessing it also saved a bunch of money, as they paid for it so many years earlier, when costs would have obviously been cheaper. But, like Hawaii Planner said, is it really necessary if your estate has the money to pay for it? probably not. Neither of my parents (dad deceased) did the pre-paid, probably because they both chose cremation and overall that's not very expensive at all, compared to a casket and burial.
ReplyDeleteWhat I'm hearing from you all is the planning and wishes are so important to avoid the stress for my kids. That's what we want- limit stress.
DeleteSounds like you are doing great! Congratulations on the raise, and I think that trying to live on one income is a good idea before your dh retires.
ReplyDeleteI'm having trouble getting my dh to do a will, living will or anything much less prepaid arrangements. But when my Mom died so suddenly, it was a little easier on us when we didn't have to make all those arrangements, so I want to make things as easy for my children as possible. But I have no idea how to get my husband on board.
It won't be much of a raise, but better than none so thank you. My husband verbally is on board but we need actions.
DeleteBefore Hubs mother went into the assisted living w/Dementia they went and prepaid for her funeral. That way the drawdown(and look back by Medicare)on assets didn't affect what was left when she died and each of his siblings and Hubs got a tiny bit of what was left of her estate. Had the funeral not been prepaid, the costs would have eaten up all her assets and then some(and we probably would have had to cover the extra as his siblings are deadbeats). It was a blessing to us(both emotionally and financially)as we were still putting kids through college or about it then.
ReplyDeleteAs for life insurance, you only really need it if you have people dependent on your income.(kids still not on their own or a special needs child who will always need financial support but then you are talking about having a trust for them). You can get a funeral insurance policy to cover those expenses too but really life insurance isn't a need once your dependents are grown.
I feel like while we are relatively young and will have such high out if pocket insurance costs when I retire, I need to make up for DH's work provided life insurance. Not a huge policy, but enough to not worry about cash flow. That's essentially what I added for myself, to make up for losing two different work policies. With none if my kids married, I feel less settled about their futures so do want more security for them.
DeleteBoth my parents prepaid their funerals, and both were cremated. It worked really well. Nothing came out of my siblings and my pockets. The estate would have paid, but it took months for that to be settled and in the meantime someone would have had to carry that cost. My sister didn't prepay, and now it has come out of my savings. Given the mess her estate is in, I won't be reimbursed for maybe a year. I need to do prepay for mine. Cost of food seems to be soaring here. I will need to make adjustments in what I like! Celie
ReplyDeleteIt's really about protecting my kids from additional burden. It's part of life but shouldn't add to stress if we can proactively help avoid it.
DeleteSmart or you to be so organized about your retirement. I am glad I retired from full time. I am not sure about quitting my part time job. Covid has restricted a lot of things I planned on doing in retirement, and I had a friend in December medically evacuated from a cruise ship, spent three weeks in Mexican hospital before being medically transported thousands of miles to his home state in the U.S.. I don’t want to deal with that expense or drama. Si I keep working because I am afraid to travel internationally now. On the other subject, I really want to donate my body to a medical school but I think some of my kids would have a fit Cindy in the South. .
ReplyDeleteEven if it's a while to travel internationally, there's so much I want to do in the US, places I never really explored. I'm back and forth on the medical donation.
DeleteIt sure sounds like you have really thought things through and are planning very well for retirement Sam. All the best to you and your hubs. The time is coming soon! :)
ReplyDeleteThese next two years will tell us so much about whether planning us enough. DH really needs to retire. If I add another few months or a year or two, it'll have less impact on our plans.
Delete71 months! that seems so far off yet so near.
ReplyDeleteI think the same. Under 6;years now- still nearly 6 years.
Delete71 months away, that's almost touching distance!
ReplyDeleteJon & I have to sort out our wills, as we're not married we don't have the right to inherit, there's no excuse either, one of our best mates is a solicitor who specialises in writing them! x
It pisses me off to no end when I've heard relatives of one member of a non married couples swoop in and make claim, whether financial or decision making. Yes, protect both your and Jon's wishes and needs.
DeleteRetirement is getting closer! I love that for you.
ReplyDeleteIt is-but I really need to do a better job of using my vacation time and enjoying my time now as well.
Deletecheck with AARP about life ins. Some funeral homes will let you make payments or list them as POD on a savings acct. Talk to the funeral home you would use. Dad prepaid his funeral... it was actually better than when we had to wait for the life ins to come through for Mother.
ReplyDelete