A year ago, our household saw a dramatic decrease in income: my husband retired (cutting his income to $0) and I went on sabbatical (reducing my income to three fourths of the usual). Our pastor asked my husband if finances had me worried -- my pastor knows I'm a little on the fanatical side when it comes to frugality. My husband just had to laugh. "Are you kidding? This is Miser Mom! Being forced to figure out how to live on so much less is like heaven to her!"
And it was true. I happily sat down with my spreadsheets. I cut back on retirement investments for the year; I trimmed our charitable contributions a tad; I made sure our emergency funds were solid; I rallied the family members into monthly meetings about living within our earnings; and then we marched confidently into this financially lean year. All was good.
And then, my husband came home a month or so ago to tell me about a change in our status. He'd waded through the Rube-Goldberg-maze of Social Security regulations, and had decided that rather than wait until 70, it makes sense for him to start collecting Social Security now. The logic--according to the officials he'd talked with--has three parts to it: (1) something about benefits being based on average salary, so by not working now he's lowering benefits if he waits longer. This doesn't mesh with what I've heard elsewhere, but my husband believes it and the deed is done, so I'm just saying this is the reason HE gave. (2) Experts say that waiting makes financial sense if you expect to live a long while. For some reason my husband has it in his head that he will go downhill quickly after 70 and so the money now makes more sense. I'm dubious. But, more convincingly, (3) we have adopted special-needs kids who are still under the age of 18. And there's a social security bonus until they reach a certain age, meaning collecting social security now brings us extra money.
So all of a sudden, we now have a surprising influx of money to off-set the relative austerity measures. Especially because of that adoption bonus, my husband will be "earning" twice as much as he did during his last year of work (when, admittedly, he worked part time). It's raining dollars in the Miser Mom house suddenly.
My husband told me about the money we'd be getting, and he looked at my face, and he laughed again. "Yeah, I knew this would be a problem for you."
And I admit that I was feeling more than a little bit of angst. Because, really, what are we going to DO with this money?
I know that having more money isn't really a problem. I do think it's funny that my first reaction to my husband's news was to squirm. But I do squirm: money is a powerful thing, and I don't want to spend it in a way that subverts my values. I don't want to blindly succumb to lifestyle inflation. I don't want to buy something now that obligates me to future expenses that I will regret. This money gives our family more chances to do the things we want to do, but it also gives us more chances to do the wrong things. So figuring out how to move this money back into our life takes just as much thought -- or maybe more -- than it took to cut it out of our lives.
By now, a month or two later, we've come up with a plan. (I mean, it's me, so of course I have lists and plans for everything). The actual plan is the subject for other posts -- for now, all I want to say is that getting extra money isn't all whoop-de-doo.
Still, if you'll excuse me, our family has a little whoop-ing to do.
And it was true. I happily sat down with my spreadsheets. I cut back on retirement investments for the year; I trimmed our charitable contributions a tad; I made sure our emergency funds were solid; I rallied the family members into monthly meetings about living within our earnings; and then we marched confidently into this financially lean year. All was good.
And then, my husband came home a month or so ago to tell me about a change in our status. He'd waded through the Rube-Goldberg-maze of Social Security regulations, and had decided that rather than wait until 70, it makes sense for him to start collecting Social Security now. The logic--according to the officials he'd talked with--has three parts to it: (1) something about benefits being based on average salary, so by not working now he's lowering benefits if he waits longer. This doesn't mesh with what I've heard elsewhere, but my husband believes it and the deed is done, so I'm just saying this is the reason HE gave. (2) Experts say that waiting makes financial sense if you expect to live a long while. For some reason my husband has it in his head that he will go downhill quickly after 70 and so the money now makes more sense. I'm dubious. But, more convincingly, (3) we have adopted special-needs kids who are still under the age of 18. And there's a social security bonus until they reach a certain age, meaning collecting social security now brings us extra money.
So all of a sudden, we now have a surprising influx of money to off-set the relative austerity measures. Especially because of that adoption bonus, my husband will be "earning" twice as much as he did during his last year of work (when, admittedly, he worked part time). It's raining dollars in the Miser Mom house suddenly.
My husband told me about the money we'd be getting, and he looked at my face, and he laughed again. "Yeah, I knew this would be a problem for you."
And I admit that I was feeling more than a little bit of angst. Because, really, what are we going to DO with this money?
I know that having more money isn't really a problem. I do think it's funny that my first reaction to my husband's news was to squirm. But I do squirm: money is a powerful thing, and I don't want to spend it in a way that subverts my values. I don't want to blindly succumb to lifestyle inflation. I don't want to buy something now that obligates me to future expenses that I will regret. This money gives our family more chances to do the things we want to do, but it also gives us more chances to do the wrong things. So figuring out how to move this money back into our life takes just as much thought -- or maybe more -- than it took to cut it out of our lives.
By now, a month or two later, we've come up with a plan. (I mean, it's me, so of course I have lists and plans for everything). The actual plan is the subject for other posts -- for now, all I want to say is that getting extra money isn't all whoop-de-doo.
Still, if you'll excuse me, our family has a little whoop-ing to do.
#1 is flat out wrong. I don't know about #3, that might make it worth it.
ReplyDeleteThank you for saying this. What's done is done here, but perhaps we can keep other people from wandering into the same mistake.
DeleteBtw, the SS field agents get a commission every time someone claims. SS has tried to change this but the union refused.
DeleteYou are kidding, right?!? No, I know you're not. This is pretty awful. Sheesh.
DeleteI also agree with you on #1, and who knows about #2, but #3 sounds good!
ReplyDeleteAs for how to spend it, I'm imagining savings for things like college or other schooling and health expenses. Meanwhile, suspense builds!
Ha, ha! Didn't mean to create suspense. All will soon be revealed!
DeleteWishing your husband a long, happy retirement. Hard to predict the future. Many choices for allocating the abundance: charitable gifts, college funds, home down payments for offspring, travel, home repairs & improvements. Best wishes for everything good.
ReplyDeleteThanks for the good wishes! Your list pretty closely matches ours (as the next post shows). College funds are fully stocked, mostly because the boys are likely to go to a very inexpensive (but good) tech school instead of a pricey liberal arts college.
DeleteRan a back of the envelope calc on SS for my partner. Actuarially speaking, SS says he'll make 82 and so it's best to file at 70 not 67 (assuming no investments of SS money). But CDC data wise (i.e. taking into account race and tobacco status), I suspect he should probably file as early as possible. Particularly since there will be an under 18 dependent at 67 but not 70.
ReplyDeleteYeah, I suspect that the *real* reason my guy went ahead and started SS now was more psychological than financial. I am guessing that just knowing that the money was OUT THERE, and that until he actually signed up, the decision about when to sign up would keep hanging over his head (what if somebody takes SS away? What if I die early?) both were too much for him. It was just easier to make the decision now and be done with it.
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