Home > Archive: December, 2023

Archive for December, 2023

Looking ahead to 2024 and some confusing income and tax questions

December 23rd, 2023 at 05:31 pm

My friend and neighbor came over this morning to drop off a Christmas present and some cookies she baked. I gave her my present earlier, not knowing if I would see  her again before Christmas, but forgot to put the second half of my gift in the bag, so while she was here, she let me slip it in her pocket. Smile Wonder if she'll peek.

I have not done much Christmas decorating this year, but I did put out this over-the-top, festive tablecloth my Slovakian grandmother made in 1975. Nothing brings me back to Christmases past like this tablecloth. Many a Christmas dinner was enjoyed on it. How she kept it clean, I have no idea. It is not very durable and is made of felt, with lots of beads and sequins, yet somehow I've been able to keep it all these years.

This time of year always flies by after so many weeks of warmup. Before you know it, it will be New Year's, then tax time...ugh.

I am thankful I am not traveling...anywhere...for Christmas. It always seems like such chaos at the airports, and on the roads.

I'm eager to think about what 2024 holds in store for me. It's an important year, as I'll be picking out a Medicare plan next summer and quitting my p/t writing job so I will become fully! That's going to be a big change....meaning, spending down my traditional IRAs for living expenses between age 65 and 69. At 69 and a few months (determined to be the most opportune time to begin) I'll start getting Social Security.

It's another big milestone that will make spending down personal savings unnecessary, but I guess I'll continue to do so, converting the distributions into taxable savings that I'll reinvest, since at age 73 I'll need to start making Required Minimum Distributions as a percentage of my total IRAs.

One thing I haven't really figured out is how, exactly to structure my IRA withdrawals at 65. I recall my mother had her savings with T. Rowe Price, and they made it easy to do RMDs by taking proportionate amounts from all of her funds so that she she could preserve her asset allocation; the balances on each fund was reduced by a little instead of being sold off entirely.

But say I want an income of about $40,000, or $3,333 a month. It doesn't sound like much, but I still have about $1,000 gross coming in monthly from my annuity, so $51K a year is plenty. Should I just have Vanguard make monthly auto deposits to my checking account, proportionately, or is there a better way to do it?

Also, if I take $40,000 a year in traditional IRA income annually from age 65 to 69 (and maybe longer), then I'll have reduced my total traditional IRA monies by about $160,000 so that at 73, my RMDs will be lower, also possibly keeping me in a lower tax bracket.

I don't need that much income with my annuity, and in fact, the less I take from personal savings (taxable distributions) now, the more I get back in property tax credits in my town. I guess that's not as important as reducing RMDs, but it is a generous tax credit; you can make as much as $70,000 and still qualify for $920 off your property taxes. If you made under $45,000, you are eligible for $2,900 off your taxes, and there are a few tiers in between.

I always wanted to take advantage of this program (and a less generous state tax credit), but perhaps $2,900 a year is not all that important in the grand scheme of things.

One final question in my mind is how I should go about buying a new car/SUV. My Honda is 10 years old, at this point, with just 101,000 miles, so I could certainly hold onto it longer, but truth be told I knew within a year of buying it that it didn't really suit my needs. I'm ready to buy a  new vehicle as soon as this month (!), or I could wait another year or so.

What I'm wondering about is how to come up with the roughly $25,000 (after trade-in) for purchase. (I like to avoid car loans.) If I take it out of traditional IRAs, that's taxable income, and so in addition to my local property tax credit, higher taxable income also might affect my Obamacare premium amounts, which might be one reason to wait til age 65 when I'm on Medicare.

It looks like Toyota's current finance rate is 4.99%. I suppose I could withdraw from my Roth IRAs, which is not taxable income, but not sure if that's advisable since I had wanted to use Roth IRA monies to "top off" traditional IRA withdrawals to avoid bumping up into a higher tax bracket. It just would give me greater flexibility.


Prices down, prices up

December 4th, 2023 at 10:30 pm

I was surprised to discover that Netflix offers a very cheap option, if you're willing to deal with ads. I mean, it's actually cheaper than Hulu, which I had, so I decided to drop the Hulu, where it's difficult to find interesting shows, and reacquaint myself with Netflix.

I got a ton of recommendations for feel-good type TV/movies from one of my hygge groups so I think I'm set for a good 6 months, but if you have any shows you absolutely loved, please let me know. I started watching The Crown last night. And, actually, the interruption by ads was really minimal.

The level in my oil tank finally dropped to the halfway point, allowing me to order heating oil today, while prices are a bit better than they were since last I checked prices in mid-November. They'll only go higher from here when the cold weather really hits us, so now's the time. I couldn't order earlier because when I had a new oil tank installed this past summer, they had to dump the bottom part due to sludge so I lost one-quarter tank rather quickly but had to wait since most oil companies around here require a 100-gallon minimum order. Usually, I top off the tank in late summer, when prices are cheapest, and then don't have to order again til early February.

I am in the final hour of a 24-hour fast, and feel pretty good. I like to keep busy and active during a fast so I don't sit around with time to dwell on hunger, so I worked out at the gym this morning and spent over an hour cutting up burning bush branches I cut down a while ago so they'll fit in the trunk of my car for transport to the transfer station. I don't really feel extreme hunger, which is good.

Tomorrow is back to physical therapy with dad; after tomorrow, he has just 2 more sessions to go. I have 2 doctors' appointments of my own on Wednesday, then more PT for dad on Thursday.

With just one more month left in the year, I'm trying to be lean with the spending so I can whittle away some more at my year-end expenses, which right now are roughly $7,000 in the red. For the past few months my income exceeded expenses and would like to continue that streak for one more month (although I will be ordering roughly $400 worth of heating oil, which is an atypical expense).

Next week there will be a tree at the community center where seniors in need can hang their personal wish list for gifts. I have not done this before (didn't know about it) but would like to "adopt" a senior or two and buy them what they need. We also have a fund in town where you can do the same with whole families, but since I myself am a family of one, I feel more comfortable buying for another individual.


December Doings

December 1st, 2023 at 11:18 pm

It's official. I'm now an elected board member of a new statewide environmental group I got involved with last summer. We've had a few monthly zoom meetings since then, so I've really only met the founder of the group in person, at a beach cleanup, but we're planning an in-person holiday get-together at a restaurant owned by one of the board members.

I'm trying to decide if I should look to get involved in another group in town. There's another environmental group I was involved with for the past year to a fair degree, but they seem to be taking a hiatus for the winter and we haven't had any meetings. I'm thinking maybe of joining one of the garden clubs. There are 3 in town and I already belong to one of them but it's mostly online during winter; in summer there are garden tours of members' homes and guided walks for foraging and stuff like that.

Today, I finished writing a story assignment early, which  like to do just to get it out of the way, especially during this time of year. I have another one due Dec. 20 so I will want to get started researching that one the week after next.

I think I have a leak from my dishwasher somewhere. I rarely use it, but the past month or so I have been running it every other day, and I'd begun to smell a mildewy smell. For now, I've just stopped using it, and the odor has disappeared, but I suppose at some point I'll have to call a plumber? I hate calling them as they are so freaking expensive. Maybe I could try an appliance repair person.

Today I ran down to Aldi's for a few things. I am always impressed with how much I can get for a relatively small amount, like $40. At the more mainstream supermarkets, I am shocked by how expensive everything has gotten. I shop pretty much everywhere as there are certain things I can only find at certain stores, etc.

I'm pretty much done with my Christmas shopping.  I already had my cousin's gift shipped directly to him, and I gave my other cousin her gifts when I saw her Thanksgiving. I have a gift for a friend, and my father yells at me every year when i bring up the subject as he doesn't want me to spend any money on him. I may just put together a basket of good food items as he can't browse a supermarket anymore and get what he wants, and relies on my sister to do his grocery shopping. Unfortunately, much of what he craves is not good for his health, and my sister's careful protocol has greatly reduced his sugar and fat intake, to the point where he is now pre-diabetic, not diabetic.

I've done a little decorating around the house, but have not yet dragged down the big tree from the attic, and may not as it's a pain to do, plus hanging all the ornaments. If my cousin ends up visiting right after the holiday, I may be inspired to decorate more.

My father has just 3 more physical therapy visits. I don't mind driving him, though at the same time it sucks up a lot of my free time and I'm looking forward to recapturing some of that. Of course, right after physical therapy ends, we have a return trip to his endodontist and a return to the low vision clinic. Hopefully we'll wrap up all of it before the snow flies.

I had some time the other day to explore the site and spent several hours reading about my options and the many different plans. I already knew I wanted to go with traditional Medicare and a Medigap policy. The Advantage plans are enticing due to their low cost and all the extras thrown in, but from everything I've read, they work well until you really need them, like with a surgery or major illness. Also from what I understand, if you went with a cheap Advantage plan early on but later wanted to switch to traditional Medicare, they would look at your medical history, pre-existing conditions and all that, and maybe charge you accordingly. And maybe decline to accept you. So I went ahead and even picked out my Medigap plan (Plan G, with Cigna) and my drug plan (Wellcare), and at least for this year, my monthly cost would be $395, which feels doable, although prices will rise each year.

I still have another 8 months, but it's nice to feel prepared. When we get closer to my 65th birthday, I'll check in with an insurance agent just to ensure my choices make sense for me.