One of my goals this year is to become better prepared for retirement. I’m the first one to admit that I’m starting late. I have a small pension plan set up, but I don’t feel confident enough to completely rely upon it come 20-25 years from now. I’ve also had some close friends recently retire and realize that poor planning can cause undue anxiety and uncertainty; something I don’t want to worry about when I reach retirement age. For September, I marked down in my calendar to begin a 403 (b) to help support my piddly pension plan. Though I won’t be able to contribute to it as much as I’d like in the beginning, at least it’s a start!

Learning from others mistakes, here are my top ten signs you’re not (or I’m not) prepared for retirement:

10.) “Gone Fishin’” or camping is a slogan you wish to live during the retirement years. Reality check: Though camp site fees range from free to $20 a night, camping every night in a tent or camper is unrealistic. Most camp sites have a maximum-night stay and the large, comfy RV’s are expensive (about $275K for a base model!). I love camping, but when I’m 70 I may not want to be warming myself over a camp fire every night.

9.) You don’t plan to live long after retiring. Reality check: People are living much longer these days. Even if you retire at 65 or 70, you might have another 15-20 years of living to do. Trying to eek out an existence for an additional 10 years on an income you originally thought you’d need for only 5 years is tough.

8.) You plan to work until you drop dead. Reality check: People have many different definitions for retirement, such as working part-time. This is a great way to supplement a retirement fund, but deciding to NOT plan for retirement because you think you’ll just keep working isn’t a plan at all. Though people are living longer these days, illnesses and disabilities are a reality of growing older. (I just rode my bike a few miles the other day in 100+ degree heat and let me tell you: I’m too old for that crap!)

7.) You’re banking your nest egg on the sale of your home. Reality check: Prior to the real estate’s bubble rise and fall, most people didn’t consider their home or property their retirement fund. However, during those few years, people began thinking more about how the sale of their home could be their nest egg. Unless you purchased your home many, many years ago at a bargain-basement price, counting this as part of your retirement fund may not be such a good idea due to the volatility of the real estate market.

6.) The federally-funded nursing home is looking more appealing every day. Reality check: No one plans on ending up in a nursing home before the age of 65. However, poor planning combined with poor health equals limited options.

5.) You’ve lately found yourself eying your grand-kid’s bedroom counting down the days until they move out. Reality check: Depending on your family’s culture, moving in with immediate family may be a reasonable option. However, if it’s not considered the “norm” within your own family or culture, you might want to have a sit-down discussion with those you intend to intrude upon share space with and make sure everyone is in agreement.

4.) Commune-style living is something you’ve wondered about, and are now thinking you’d like to try. Reality check: I don’t know much about commune-style living. Those words alone conjure up images of hippies growing their own food. Who knows, maybe it’s a great option for retirement!

3.) You plan to stay young forever. Reality check: Unless the fountain of youth has been found, chances are we are all going to get old sooner or later. As the saying goes, “It’s better than the alternative!”

2.) You’re still waiting for your ship to come in. Reality check: The ship’s not coming!

1.) Too many of my top ten signs are eerily hitting the nail on the head! Reality check: Like me,  you’re running a bit behind. It doesn’t mean you can’t catch up or at least begin a solid plan towards your retirement. Start today or mark it down as a “to-do” on your calendar to start this year. The key to compound interest is TIME, something that begins to run sooner than you think!

Though many of my signs are very tongue-in-cheek, the bottom line is retirement planning needs to begin before retirement begins! I’ll be following up this post with  my detailed plan in the next couple of months (keeping me accountable for my goals!)

Do you have a handle on your retirement? What advice would you give someone starting late?

Tuesday Tips, Just Another Great Post from Little House. I'm so humble.

This week’s Tuesday Tip, pick up trash at your local park or favorite camp site. It often blows my mind how an entire bag of fast food can end up on the ground at my favorite campground. People should feel privileged to experience the great outdoors instead of trashing it. This weekend while camping, my husband and I walked around the camp site and picked up a small bag of trash. I felt like the little bit we did was good for the park.

Tip #25: Make it a challenge; pick up 20 pieces of garbage at your favorite outdoor hang-out.

• Keep our parks clean. The cleaner our parks are kept, the longer they’ll be accessible to the future generations. I don’t have kids (yet), but I do see the value in preserving our parks and forests for future generations to enjoy. Picking up trash and placing it in the dumpster is a simple step towards cleaner parks.
• Keep our park fees low. Just think, if we all dropped our trash on the ground and didn’t pick up after ourselves, more park rangers and maintenance people would need to be hired. While this may be good for the economy, park budgets are usually the first to be “cut” out of the budget (so no new jobs are formed.) Making up for this expense would either mean closing the park or raising the entrance or camp site fees. I don’t know about you, but I’m already paying $20 a night to camp at my favorite site!
• Use this as an inexpensive exercise activity or game. Keep the kids moving and make trash pick-up a game. Of course, you might want to set some safety rules before you begin; like don’t pick up sharp objects, glass, or toilet paper – that still leaves plenty of things they can pick up, like bottle caps and candy wrappers! The first one to collect 20 trash items gets to choose dessert (or something to that effect!)

A clean environment is a healthier environment.

• One less plastic bag or chip bag is better for the environment. Instead of watching the refuse flow down the stream only to get caught up in a tree branch, make it one less item that will become a catch-all for garbage.

You might have noticed my header states I’ve “Gone Fishing.” I just couldn’t find a “Gone Camping” sign in time to replace it, so for now it will have to do. But YES, I’ve gone camping and will be back in time for another Tuesday Tip! In the meantime, feel free to snoop around for articles that whet your appetite. OR, take a peek below at some camping tips (mishaps from my more naive days):

1. Love da ‘coons! – Want great critter photos? Just leave delicious chocolate Power Bars on the picnic table right out side your tent. I never knew raccoons loved Power Bars, too.
2. There’s nothing better than a campfire, minus the smoke. – Making a long-burning campfire takes experience and finesse. There’s nothing better than getting the logs all sorted, then watching them smolder in their own smoke.
3. Day 3 – forgo that makeup and forget about brushing thy hair – Day 1: arrive clean and well kept; Day 2: brush hair, throw it up in a pony-tail, put on a little make-up and deodorant; Day 3: the grime has set in. Forget about the hair or makeup, just putting in the contact lenses is good enough! Oh wait. We’re going into town?! Crap.

Some Yakezie reads for your pleasure:

• Everyday Tips and Thoughts with Got Some Money? A Private Island May be Just for You! I don’t know about you, but some days a private island sounds real nice!
• The Saved Quarter with a Giveaway: The Secret to a Successful Budget.  Budgets made easy?
• Ultimate Money Blog with Stop Buying Bottled Water! I couldn’t agree more.
• Len Penzo with 22 Signs Your College Degree Might Not be Worth the Money. I love that one of the comments mentioned a friend taking 10 years to get their Leisure Studies degree. That’s hilarious! Of course, maybe that was the point.
• Frugal Zeitgeist with Cost of Living by State. I like comparing state cost of living statistics. However, I usually find myself wanting to move someplace less expensive.
• One Money Design with Earn Cash-Back Rewards with PerkStreet Financial. Sounds similar to SmartyPig. I really like the sound of the Starbucks gift card rewards, though…mmmm.

See you soon. A wee-ma-whack, a-wee-ma-whack, a-wee-ma-whack, a-wee-ma-whack….

Each month, I chip away at a little bit of principal on my Crummy Line of Credit. Little by little, the total balance due shrinks. However, the process has been slow-going and quite frustrating. The loan itself is a monster, and with an interest rate at almost 30% (29.99% to be exact) it’s disappointing to see how much interest I’ve paid over just this year alone: a whopping $1,557.98. I’m terrified to actually pull a Quickbooks report and find out how much I’ve paid on the life of this loan to date.

But……I’m happy to report I managed to secure a much, much lower interest loan and pay off more than HALF of the crummy line’s balance. Whoo hoo! Of course, I’m just moving half the total balance due to another financial institution that I have to pay as well, but at an incredibly low rate (and zero percent to start), I can focus on getting the crummy line’s balance paid off.

Here’s what I did; I paid off $3,500 of the remaining $7,626.77 using the new, low interest loan. Because I made a whopper of a payment, the financial institution offered me a “settlement” amount that is $1,480 LESS than the original loan balance for a total of $2,646.56 remaining. The $3,500 loan is zero percent interest for a year, then a low 7.5% fixed rate.

The remaining $2,646.56 is no longer generating interest charges, but it is generating a daily fee of $5.99. I agreed to make two more payments of $1,323.28 and will have this baby paid off by the end of October. Not too shabby compared with the 32 months it would have initially taken me and the interest I would have paid, $3,526. Yikes!

According to Credit Karma’s calculator, the $3,500 low interest loan will take approximately 10 months to pay off at a monthly payment of $350 and zero percent in interest if I stick to my plan of paying it off in 10 months. Here’s a quick comparison:

• Total paid in fees on the remaining crummy line of credit: $359.40
• Total amount of time until zero balance: 12 months
• In contrast, if I had kept the crummy line of credit I would be paying $3,526 in interest over 32 months. Yuck.

For those visual learners out there, here’s a quick visual aid:

Crummy Line of Credit Balance Due

Lower Interest Rate Loan: Switch and Bait

By calling the Crummy Line of Credit’s customer service and explaining that I wanted to make a large payment, I was able to negotiate a “settlement” amount. If I had been able to pay off the complete loan balance, I would have saved an additional $359.40. If I can pay if off sooner than expected, I save approximately $5.99 per day.

For now, I’m happy with the idea that this sucker will be completely paid in full and no longer generating balloon-interest payments.

Have you negotiated lower balances or “settlement” amounts to reduce a debt? What was your experience?

Tuesday Tips, Just Another Great Post from Little House. I'm so humble.

This week’s Tuesday Tip, black-out your windows to reduce cool air from escaping. Living in a rental house with older, drafty windows has made me aware of how difficult heating and cooling a house can be without good sealant. Since I’m not going to replace the windows in my rental home, I’ve had to come up with less expensive alternatives instead.

Tip #24: Black-out your windows using drapes, blinds, shutters, or reflective film.

• Reflective film: One of the least expensive ways (besides a tube of caulk!) to reduce heat seepage is by purchasing a self-adhesive reflective film that you can cut any shape to fit your windows. It’s not the most attractive option, but it has definitely kept the heat out of our east and west facing windows. Note to self: Do not purchase a home that faces west!
• Dark-colored curtains. Curtains and drapes may sound passe, but you can still score some modern-looking curtains that are more attractive than flimsy blinds. When we first changed out our cheap, flimsy blinds, we opted for a rust-colored drape for the fore-most facing window. The curtains, along with the reflective film, minimize the amount of summer sun that bakes our computers.
• Shutters or wood/faux-wood blinds. As much as I would have loved to install shutters on the outsides of our windows to block the heat, it just wasn’t in our budget and didn’t make financial sense considering we live in a rental house. Instead, we purchased faux-wood blinds for much less. The thicker, wider levelor’s block out quite a bit of heat as compared to the less expensive, thinner metal ones.

Keeping the heat out is better for the environment.

• Reducing the amount of heat that seeps in means using the air-conditioner less often. There are still days when I need to turn on the air conditioner. However, by blocking most of the sun’s heat out, I can turn the air on later in the day running it less often. This saves electricity, which means I’m reducing my carbon footprint.