December 2012


This will be our last post of 2012! We hope everyone has a Merry Christmas and a Happy New Year! We’ll see you again the 2013.

This week, I (Dawn) read a post by Lisa Aberle over at Get Rich Slowly that made me laugh. “Avoiding freezer burnout” is all about the downfalls of using a freezer for food storage.

I personally have never been a fan of using a freezer to store food long term. I’ve read plenty on the subject—it can save you money by buying in bulk, it can save you time by prepping meal ahead, etc. I’m sure all these reasons are sound, and if you are an avid freezer user, I’m sure you have your reasons, but this post by Aberle made me think of the reasons I don’t stand by it.

It doesn’t save money if you never use what’s in there

Seems pretty logical, but when you’re stocking your freezer, unless you have a specific plan for what’s going in, it may not come out again. I’m all for putting some meat in there that you know you’re going to be using for a dinner in a week or two, but just managed to catch it on sale at the store. However, sometimes things get lost in there, even if it seems to be a small space.

When my husband and I bought our house, we were given a refrigerator/freezer. It was great, one less expense to have to worry about when dealing with our fixer-upper. The only problem was the previous family member who owned it decided that the shelf in the freezer (top freezer) wasn’t needed. So, we have an open space freezer where everything has to be shoved in on top of each other. Unless I go in there and pull everything out, I would never know what’s in the back underneath all the visible stuff. Which I’ll be honest and say I don’t often do.

So what goes in may never come out. Especially things wrapped in foil. After a certain amount of time, I’m not sure I really want to know what’s in that foil.

What happens when you lose power?

Aberle doesn’t specifically talk about this, but this is the issue that really bugs me. Even if you are a diligent freezer user and never waste any money losing food in there, what happens if you lose power? Even if you don’t see that as a potential threat, it can happen, and it can mean the loss of your freezer stock, which depending on your usage, may mean a lot of money wasted.

I have had this happen to me before, and I live in an area where power outages are rare, and when they do occur, are short lived. However, a year or two ago, we had a power outage that lasted more than a day, and resulted in the loss of almost everything in our freezer and the fridge. For us, it wasn’t too damaging, but I can imagine what it would have been like if we used the freezer more often.

Use at your own risk

Aberle gives her rules of thumb while using the freezer after realizing how much money she was wasting in food:

  • “Don’t make so-so dishes! With more experience, I am a better cook and a better judge of which recipes will be good ones
  • Don’t make so much food
  • Barter the food we don’t like
  • Honest appraisal of what we really eat.”

If you want to use the freezer, go ahead and do so. But don’t be surprised if you find a foil wrapped something in the back that you can’t recall putting in there in the first place.

 

  • Disclaimer: The information on this blog is not meant for specific financial advice. The ideas/opinions stated are not suited for everyone, and readers should use their own judgment in applying them in their financial lives.

It’s been awhile since we had a book recommendation here, but we’ll be looking to get back into it. Our recommendation today is The Hard Times Guide to Retirement Security by Mark Miller.

This book concentrates on three aspects of retirement and the years leading up to it: money, work, and living (the three sections of the book). Each section has great information about how to manage each aspect of your life.

In the “money” section, Miller concentrates on strategies to manage your retirement money: Social Security, pensions, annuities, 401(K)s, etc. He also talks about how to manage your increasing healthcare expenses (concentrating on Medicare) and taxes in retirement. This section is by far the most comprehensive.

The other two sections, while less comprehensive, provide ideas on managing working and living later in life. There are tips on how to find work ages 50+ and how volunteering to help others can really help enhance your retirement.

There are a few chapters in this book we think everyone approaching retirement should read.

  • Chapter 3: “Getting the Most from Social Security” – Social Security is complicated. Many Americans approaching retirement don’t think much about it. If they retire at age 65, the file for Social Security. They retire at 55 without thinking about the affect it will have on their future Social Security benefit.

Social Security is too important an asset to retirees for you to walk into it blindly. Doing so can cost you money, sometimes into the hundreds of thousands of dollars, over the years of your retirement.

We won’t go into too much detail here, but we can’t recommend in depth Social Security planning enough. According to Miller: “[…] most Americans will rely on Social Security as their most important source of support in retirement—39 percent of total income on average.”

 Much too significant to pay such little mind to!

  • Chapter 8: “Taxes and Retirement” – Taxes can become much more difficult in retirement. You’ll likely have numerous streams of income, which could be taxed differently (income tax, capital gains tax, etc.).

Do you understand what withdrawing from your IRA will do to the taxes you’ll owe? How about taxes on your Social Security? Do you know what accounts you are required to take a minimum distribution from annually and when they need to start (and how to figure out how much to take)?

We’ve recommended here before that if you are entering retirement, you may want to hire a tax professional to do your taxes, even if you are used to doing them yourself. Even if it’s just for a year or two, it can help you understand the ins and outs of taxes in retirement better.

Miller addresses some of the key components of retirement taxes in this chapter. While the detail is a little sparse, it’s a good jumping off point for understanding.

  • Chapter 16: “Making a Difference: Encore Careers” – “Retirement” doesn’t mean that you have to stop working all together. In fact, depending on what age you retire, you will hopefully have decades of life ahead of you. That’s a lot of free time. Starting an “encore career” will not only help you fill your time productively, but it can help ease your financial burden by providing income.

Retirement from your current career can be a great choice for many people. Maybe the job has gotten too stressful and is affecting your health. Maybe you’re just bored and can face another few years doing the same work. Or maybe it’s a forced retirement, something you have no control over. Whatever the case, there are still many options for you!

Miller does a good job discussing encore careers in this chapter. As the chapter title suggests, he concentrates on careers that have a positive impact: Not-For-Profit careers, teaching, etc.

 Why it’s Worth Reading

The Hard Times Guide to Retirement Security is a fast, easy read, with great ideas and good resources. We see so many people approaching retirement become stressed out about what comes next. How to make the transition, confused about finances, and overall uncertainty about taking that step. We’ve also seen people already in retirement floundering for something to do when they don’t have to get up and go to work every morning.

This book can give you a starting point; a way to start reviewing your situation and make some decisions. Make sure to check out the resources Miller provides at the end of every chapter, you may find something useful for your situation.

 

  • Disclaimer: The information on this blog is not meant for specific financial advice. The ideas/opinions stated are not suited for everyone, and readers should use their own judgment in applying them in their financial lives.