Category Archives: Saving

Still In His Prime

Dear Jewish Fairy Godmother:

I’ve worked for 35 years and could afford to retire tomorrow if money
were all that mattered. But I just cut a fabulous deal to go to .25 time
at my firm as a Senior Advisor starting in January, make big bucks per
hour, and even be eligible for a bonus. I am simply not ready to give
up such a windfall, at least without trying it for six months. But my
wife says I am too stressed out and I should quit. I say look at the
vacations we could take with the money. You get a vote, though I
know the details are sketchy. What say you?

Still In His Prime

 
Dear Still In His Prime:

Money is hard to turn down; in our society it is a necessary addiction.
Big money almost always comes with stress. Ironically, we can get
addicted to stress as well. My vote is to map out a typical week with
your wife. If you can limit work to fixed hours that will not corrupt
your ability to make a new life (for example, three to four hours a day
on Tuesday, Wednesday, and Thursday) and truly restrict it to those
hours, .25 might be feasible, like a hobby that pays you while you
develop new, lower-stress things to do with your time. But my bet is
that it expands into five days a week pretty fast unless you are
vigilant. I would commit to a three-month probationary period, and
then review how it’s going with both with your wife and your
employer.

 
But don’t delay creating your second life too long. You my find that
retirement is much more fun than you think or fear.

Is 75% Enough?

Dear Jewish Fairy Godmother:

My ex and I were together for twelve years. We’re lesbians but that
matters only in the sense that neither of us adopted the other’s bio-
child. The oldest, hers, just got into a very expensive private college
which she prefers to a state school. She got very little financial aid and
I am being blamed (!!!!) because my family and I set up a trust fund
for her education. There’s about $150K in it now, which is roughly
three-quarters of the tuition/room and board that would be required.
It’s on the other side of the country so there’s travel and incidentals to
pay for as well. Assume we’re about $75K short.

 

Her mother, who took me to court (and won ?!?!) to get access to the proceeds
of a vacation home that I owned before we got together is pleading poverty.
She’s a real-estate agent. I know the market is bad and the vacation cottage
may not sell for a while. Also that she doesn’t like to work, as
witnessed by the significant depletion in my own net worth during our
time together. I want Hannah to go to the college she wants to, but I
don’t feel that I should have to foot 100% of the bill. The clock is
ticking on saying yes. I know they’ll keep coming back to me for
everything and as much as I love Hannah she is brainwashed by her
bio-mom. I also don’t trust my ex not to skim funds for herself.

Is 75% Enough?

 
Dear 75%:

I think you have some solid ground to stand on regarding lifting more
than half the expenses, and some righteous leverage to put your ex’s
feet to the fire, assuming you don’t want to pay 100% of everything.
I’d counsel an email, to both of them, that goes roughly like this:

Dear Hannah/Ex: I’m glad you decided on Good School over State.
Here’s my understanding of costs. Four years will be about $200K. My
family has put about $150K into funds for Hannah’s education. I’m
happy to transfer that into a trust fund in her name, and to have that
fund administered by an attorney who will pay the school directly. In
addition I will put another $25K into the trust fund after the vacation
home sells. I’m happy to be able to help you go to college and hope
you succeed in your dreams. I think this contribution is a strong show
of love and support. I think Ex should be able to contribute the
remaining amount of tuition/expenses those out of her proceeds from
the sale of the vacation home. I love you lots – Mom
Nothing can keep your ex from trying to nickel and dime you to death.
But you can set some boundaries that have legal teeth.

Happy as Is

Dear Jewish Fairy Godmother:

I have been an unofficial fairy godmother to the children of various
friends since they were tots. That include sgifts of money, helping
with college essays, and providing an auntie-like ear and perspective.
One has graduated from college; he is now selling insurance and
financial advising. There’s no way I would trust a 22-year old with my
investment money. I might consider changing insurance if it was
better than what I currently buy. But I have a 20+ year relationship
with my agent, who has served me well. And policies that do what I
want, including giving me 25% of my premium back if I do not file
claims. I like David and want him to succeed, but not at any cost to
me. He keeps telling me he wants “to practice his intro cold call” on
me and that I am “not obligated to do anything but listen.” But now he
wants to meet, then give me a bid, and compare what he can offer to
what I have. I know I will be pressed by him and his mother to switch.
Is there a graceful way to just say No if that’s what I prefer?

Happy as Is

 
Dear Happy As Is:

It may not feel graceful, but the way to say No is simply and
consistently. I’d say Yes to all the steps along the way, starting with
listening to his phone pitch. Then critique it very systematically and
honestly. Give him the kind of feedback you would if he were a student
whose term paper you were grading. When he persuades you that
meeting with him is really a good idea for you (as well as for him), go
ahead and schedule it. You can refuse to show him your current
coverage and costs. Talk only in terms of his product and his company
and your needs. Ask him the tough questions you would ask any
vendor, and give him feedback on both his presentation and the bid
that he’ll come back to you with.

 
You can review his bid and consider it. You can even have him give
you another one in a year, assuming you reject the switch. Explain to
both him and his mother how happy you are that he’s found a job in a
profession that he is passionate about. Give him pointers about
building a client base. But you do not have to shift companies just to
encourage his career. Selling anything is an acquired skill; building an
insurance clientele is a long-run enterprise. You may choose to change
down the line, but don’t be pressured now to do anything you don’t
want to do.

Bleeding Money

Dear Jewish Fairy Godmother:

Help me with a decision about money. A few years ago, just before I
turned 65, I decided to get long-term care insurance. The price was
high but less than it would have been if I had waited and had only a
ten-year premium payment period (relatively rare). But now, as I
review my financial priorities, I realize that $4K a year is more money
than I want to continue to spend for a policy that I may never need,
and that will support the last three years of my life, which, while it
might be closer still seems far away, while my more immediate needs
are more interesting and compelling. I have no children or partner
(though you are welcome to my two exes I supported for decades).

 

In my recent serious illnesses I have relied on friends and neighbors,
whom I know are relatively uninterested in wiping my butt when I’ll
need it and whom I would not expect to burden with that. But I’ve
developed a plan to divide my home into an uneven duplex and to
offer free room and board in exchange for caretaking. I bought the
policy from the newly-minted insurance-salesperson son of a close
friend, whom I think made some mistakes in his relative ignorance,
including failing to point out that should I ever wish to cancel I
wouldn&'t have any kind of built up equity in the policy. So do I
abandon the four years of premiums paid and trust that I may never
need long-term care beyond my theoretical tenant, or do I keep
paying for another six years, which is enough to pay for the duplex
remodel?

Bleeding Money

 
Dear Bleeding Money:

First you should ask your agent (who probably knows more now) if it is
too late to add a forfeiture rider to your policy. I’d bet money it would
require a new medical assessment, and could be expensive relative to
continuing to pay for the next six years. Only you can do the financial
cost benefit analysis and know whether you even have access to the
money for premiums.

 
Think about the money you spend each year on home or car
insurance. Most companies don’t give you a refund if you don&'t have
an accident or your home doesn&'t have a catastrophic event. Most of
us are happy never to speak to our agents, and some companies do
offer a percentage rebate for years of zero claims.

 
You sound happy not to be married any longer. I&'d suggest viewing the
premiums as a “single tax.” In your head, reframe the premium
amount as a roughly $10 per day cost you’re paying not to have a
partner you&'re supporting. And any future caretaker you’d install in a
future duplex will be happy to have help wiping your tush and other
sundry functions, assuming you need that done for you.