Still Clickin

When we were all younger, our “big purchases” made a social statement. It could be a house, a car, or a boat, but it qualified as “big”. It typically required a loan, and with that loan people often would reach a bit beyond their means assuming that their earnings would not only catch-up but surpass any financial requirements.

One of the delights of our senior years is that people are no longer impressed by such social statements. What now impresses our contemporaries are our health status and our attitudes toward living. The house is now a roof and the car is transportation. “Smart” means less maintenance, not styling.

Last year, we bought a roof on the other side of the country from our last roof. Since we took the downsize challenge very seriously, our new roof is only half the size of our old roof which sheltered our family when it was growing. Sometimes, it can seem a bit tight, but that is an emotional response. In truth, we have plenty of space. But it is more of a roof than a statement.

Now, I’m considering replacing a car. The only car I ever connected with emotionally was a ’66 Mustang. (That love affair ended when it was stolen.) The car I’m thinking of replacing is the original ’95 Aurora, one of the few American cars designed by engineers rather than accountants. This car still runs, but at fifteen years of age, I know its reliability (It’s been outstanding.) will start to diminish. So I’m starting to look at cars again.

The last car we purchased was a Prius, which I viewed as the only intelligent choice at that time. I still feel that way, but I don’t want to get one more of the same. I’m looking for more innovations. I’d love to see a bit more storage topped by a roof with solar cells. I’d insist on a household current converter so that I could charge the car from the house, or visa-versa.

In short, I’m not trying to make a statement. I’m after safe, reliable, and green. Prius is the best right now. Wouldn’t it be wonderful if this GM Company that we now own could produce such a green car? That would be my hope. My suspicion is that two or three years from now my only choice will be a Prius-III, which I’ll buy by then if I have no other choice. It’s not a statement, it’s transportation.

Once you are retired, one of the first steps you may wish to consider is to sell the family home. Whether you are downsizing, relocating, or cashing out, buying or selling a home is not an easy process. Typically, you will wind up feeling a bit disatisified. Both buyer and seller simply want a fair deal that happens quickly. But a fair deal only occurs when the buyer and seller are equally dissatisfied. That is simply the way negotiations work.

If you are selling -

1. Choose your best selling season. A hot selling season, e.g. Spring, has the most buyers but also the most competition. A slow season, e.g. Winter, has the least competition and the least number of buyers. Often, the best timing is the end of a slow season as the first crop of new buyers start to appear. Learn the details of what is happening in your particular market.
2. Start preparing the home at least six months before your target listing date.
3. Address obvious eyesores and problems. Don’t explain about the wobbly step. Get it fixed.
4. Paint. Use neutral shades that open the space and permit buyers to imagine their own furniture in the room. For interiors, use whites, off-whites, beiges, or pale grays. White exteriors also sell well.
5. Remove clutter. Rent a storage locker if need be, but it is critical for rooms and closets to be free of clutter. If you must, move the clutter to the garage which is the only place people might discount some of its impact.
6. Clean, clean, clean. A lack of cleanliness can cost thousands of dollars.
7. One or two months before your target listing date, interview three different real estate agents. A good agent will inspect your home, give you more ideas about preparing it, learn about your objectives, and provide you with a written market analysis and pricing recommendation. Don’t be afraid to ask for discounts; some brokers will offer them outright.
8. Consider staging your property. Professional designers can reposition furniture, add a plant, and even assemble some rented furniture to show off your home to its best advantage.
9. Choose your agent. If none make you feel comfortable, consider doing the job yourself.
10. Decide upon your asking price. This is your most important decision. It is far better to be realistic than greedy. You want to price right where the market would expect it to be. Check Zillow Home price estimates for your neighborhood.
11. Sign the documents and list the home.
12. A weekday open house for agents and a weekend open house for buyers will announce to opportunity to the world. With all your preparation, you should feel proud of your home as your neighbors and potential buyers traipse through.
13. Disappear whenever the house is being shown. Buyers are uncomfortable when the owner is present.
14. Anticipate specific feedback from any showing and react (e.g. add a brighter bulb), if possible.
15. If your home is shown to a number of buyers and it is priced correctly, you should expect to receive at least one offer during the first month, even if it is too low. However, If there is little to no activity, lowering the price is the most important change you can make. Don’t be bullied, but don’t be foolish either.
16. If you must move, and the market in your area is simply too slow, consider renting. It can be a frustrating choice, but one that might make financial sense.

If you are buying, there are a number of questions you should ask yourself.

1. Why do you want/need to move?
2. Is there a schedule you must meet?
3. What price range are you considering?
4. How many bedrooms and bathrooms?
5. Approximate size or square footage of the home?
6. Approximate size of the property?
7. What are the requirements for schools?
8. What style or age of home are you targeting?
9. What are the requirements for basements and garages?
10. Are there any local travel requirements?
11. Are you looking for an urban, suburban, or rural location?
12. Have you picked specific neighborhoods or communities?
13. How close to shopping would you like to be?
14. Are there any special health-related requirements?
15. What physical or community amenities do you desire?
16. Are there any special features desired for the home?

Once you are able to answer these questions, you will have a very specific idea of the home you are looking for. Also, check other web resources, e.g. Federal Government Home Buying Information.

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Today is the day for our high-definition digital TV purchase. The choice will be a close-out model. The new models may double their contrast ratings and offer novel super-hero innovations, but not enough to make a difference. Frankly, the stuff that is out there now is good enough for most eyes. This close-out model has a compelling feature, it offers the best bang for the buck!

The parameters of this particular HDTV selection are many.

• It is the largest size possible for the space into which it must fit.
• LCD was chosen instead of plasma because -
  • LCD is a simpler, more reliable technology.
  • The side-view, motion-blur, and deep contrast limitations of older LCD’s were nearly impossible to observe both during a fast sport scene or a studio interview setting.
  • The fine 1080 detail, rich colors, and brightness of the LCD display were compelling. It would not require a darkened room.
• It is configured with multiple interfaces to permit future adaptation.
• Since Sony is closing out this model, it is currently enjoying a 30% price discount.

Because of the rapid aging and latest-is-best psychology of technology pricing, a slightly older model can often provide the best value for technology purchases. Technology evolves in a series of plateaus. Be it a TV, computer, or camera, it takes about three years, at any given plateau, for the functionality to mature and the product stability to occur.

Now, LCD TV’s have reached that level. It was reached for digital cameras a couple of years ago. Personal computers really haven’t changed since the year 2000. Once a plateau is reached, these products become commodities, with volume quantities driving prices ever lower.

One technology that is in flux and looking for a new plateau is the pocket tech device. It has left the comfort of its cell phone capability. It has added digital camera, audio player, computer, and global positioning functionality. But none of these changes have brought it to a new plateau. Innovation will continue there until a new set of stable capabilities emerges. It will then become a very compelling product, but you have time. . . . . wait three years.

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If you are turning 65 this year, and you haven’t yet joined the “Social Security Club”, then this is your year to enroll. The questions that you will encounter in this process are presented below with a few typical answers.

1. When do I qualify for full retirement benefits?
   People who turn 65 during 2009 will not qualify for full retirement benefits until they reach age 66. You can choose to start benefits earlier, but you will pay a hefty penalty for that choice. You can assess your retirement benefits using the BEST calculator for Social Security Benefits.
2. Why should I enroll this year if I don’t qualify for full retirement benefits until next year?
   Although those born 1944 do not qualify for full retirement benefits until they reach age 66 during 2010, Medicare benefits still begin at age 65.
3. Do I need to register for Medicare if I am still covered by my company’s health plan?
   You need to check with your company’s health plan. Their plan may revert to a Medicare supplement when you turn 65.
4. When, during this year, should I enroll with the Social Security Administration?
   Typically, you should sign up for Medicare about three months before you turn age 65. This allows time for your records to be fully activated prior to your birth date.
5. Medicare has different plans, A, B, C and D. What is the difference?
   These letters represent the different parts or plans in Medicare.
   • Part A is Hospital Insurance that the government pays.
   • Part B is Medical Insurance for visits to doctors that you must pay monthly to be enrolled.
   • Part C is the HMO/PPO type of non-government private plan, called “Medicare Advantage”, that you must pay for monthly.
   • Part D is the prescription drug insurance for which you must pay monthly.
6. What is the difference between traditional Medicare, the new Medicare Advantage Plans, and the Medigap plans?
   • The traditional Medicare plan is a government program whose benefit amounts are set by the government program. Physicians accepting Medicare patients are also agreeing to accept the Medicare benefit amounts as their payment. Seniors can choose their own doctors and hospitals with traditional Medicare.
   • Medicare Advantage works either like an HMO, where you use assigned doctors and hospitals, or a PPO, where you select from a list of pre-approved doctors and hospitals. Although subsidized by government payments, these are private plans that set their own rules.
   • Today, most seniors still select the traditional Medicare program. Some will supplement that with a private Medigap policy which provides coverage for the few things that Medicare doesn’t cover. The coverage provided by these policies is strictly formalized by Medicare, i.e. F-level coverage from two different companies must provide identical benefits.
7. What is this November 15th - December 31st enrollment period that I hear about?
   Each year, people enrolled in the Part D (Drug) program may change to another plan or provider without penalty. It is called the Free Enrollment Period.
8. If I do nothing, what happens?
   Obviously, you will receive no benefits. In addition, if you change your mind and decide to enroll later, you may be assessed some penalties. The website of the Social Security Administration offers a number of other answers about Medicare.

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Is social security really guilt money? Although we seniors will receive a 5.8% cola increase in 2009 (which will partially compensate for the shortfall this year.), are these funds intended to be a retirement benefit or to compensate for the age discrimination that we face everyday?

During this holiday season, it is nice to notice the many senior citizens working at the various stores. They are invariably courteous, friendly, and helpful. They act as if they actually care. Take a good look at them. They will be gone in January.

Any employee in the US knows that finding a job becomes more difficult as you get older. Once you reach out beyond your personal network, and become just another resume in the Inbox, your odds of succeeding become considerably more difficult. There are some organizations that recognize the problem and offer help. 40Plus has been around for years, and its local chapters are dedicated to helping workers over age forty find employment.

Imagine what it is like after age sixty-five!

A personal friend of mine is an employment specialist who works specifically in the sector of senior citizens. As he reports, he can find jobs for people, but the pay scale is typically limited to $10 or $12/hour. Although some of his clients may have operated as top executives or academics and have advanced degrees and credentials, the best he can find for them is $10 to $12/hour.

Senior citizens don’t want a handout. Like any person, they simply want an opportunity and a chance to demonstrate their value. In the current economic climate, where portfolios have been reduced by forty percent or more, they also want to survive. It is a tragedy that age prejudice in our current society severely limits their ability to do that.

So it would appear we are back to our original question.

Is social security really guilt money?

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Our biggest Halloween 2008 scare is certainly the financial news. For seniors who have retired, or are about to, this type of news is certainly not encouraging. The Federal Reserve has cut interest rates by half a point once again, and the stock market seems to be primed for ‘another record’ rise or fall. The only sure thing happening is uncertainty. Whatever nest egg anyone has is certainly smaller at this point. Any income from that smaller egg is shrinking.

Of course, the financial picture is never just about finances or sub-prime mortgages. In this week’s cover story for Newsweek, The World That Awaits, by Richard N. Haass, Mr. Haass addresses President #44. He writes,

“There will be days when you will wonder why you worked so hard to get this job. What will make it so difficult is not just all that awaits, but the constraints that will limit what you can actually do. When George W. Bush became president nearly eight years ago the world was largely at peace, the U.S. military was largely at rest, oil was $23 a barrel, the economy was growing at more than 3 percent, $1 was worth 116 yen, the national debt was just under $6 trillion and the federal government was running a sizable budgetary surplus. The September 11 attacks, for all they cost us as a nation, increased the world’s willingness to cooperate with us. You, by contrast, will inherit wars in Iraq and Afghanistan, tired and stretched armed forces, a global struggle with terrorism, oil that has ranged as high as $150 a barrel, a weaker dollar (now worth 95 yen), substantial anti-American sentiment, a federal budget deficit that could reach $1 trillion in your first year, a ballooning national debt of some $10 trillion and a global economic slowdown that will increase instability in numerous countries.”

What does this mean for seniors? Truthfully, I have no idea. I can only share my suspicions.

• Since the current mess isn’t just financial, I suspect this downward cycle will be both deep and long. Financially, the world is too inter-linked for anything to happen too quickly.
• If you are mainly in stocks, I wouldn’t anticipate much performance over the next year. The bottom of the stock market isn’t going to be the result of any daily spike. It will occur as the result of some external event in the middle of a long trough. The improvement out of that trough will be very gradual for a number of weeks. I suspect the current daily spikes are simply nervous, knee-jerk reactions.
• If you are mainly in cash, feel blessed that you have maintained the principal. However, the revenue you can generate from that cash will get less before it gets better. One-year CD’s may be a smart choice at the moment, because rates may not improve that much over the next 12 months.
• If you are on social security, the cost of living formula that penalized seniors last year made up for it this year. At 5.8%, that adjustment together with the lower energy costs that are starting to ripple through the economy, will help dealing with this coming year.
• With the outlook for cash so dim, I also intend to take another look at restarting the social security clock. Check out the . Such a move might be rash, but it is certainly worth doing the math.

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There is no question that age discrimination is very real. It’s not due to workers costing more or driving up health care costs. It’s due to fear.

Step back and take a look at your standard corporation, Stagnant, Inc., today. The principal job most employees are working at is survival, i.e. to look good and avoid blame. One of their biggest exposures in that job is the hiring process. A brilliant hire reflects well on them; a poor one is an exposure.

Enter the headhunters, the experts in ‘safe’ hiring. They are in the business of providing clones of whatever that manager considers to be a brilliant hire. Age is definitely one of the criteria, and it is going to be less than the age of the hiring manager. Certainly, the hiring manager does not want to feel threatened by someone with more market savvy and business acumen.

Unfortunately, this leaves Stagnant, Inc. with the ‘same old, same old’ orientation and vision. Their hiring practices not only insulate them from experience in their own field, but in other fields as well. Today, it is impossible for someone from the petrochemical industry to switch to manufacturing. But if they did, think what a different orientation they would bring to the job. Cross pollination would be at work, and innovation would be the result.

Innovation used to be the business skill that set our country apart. Is our current economic struggle due to a loss of innovation? Certainly, you see very little innovation sparked by major US corporations today.

In the face of this, what actions should a senior take?

1. Forget the large companies. Follow the innovators, i.e. young companies doing less than $25 million in annual sales. The owner doesn’t have the time or the temperament for fear. That owner simply has a thirst for market survival and success.
2. Research the small companies in your area and identify ten that are in a growth mode. Study those firms and their competition. Identify ways that facets of your experience can help them develop their competitive edge. Once you determine that angle at a particular company, you are no longer old, you are golden.
3. Once you have an angle, get aggressive. Visit their lobby. Pick up their literature. Walk out the door and explore the lunch spots in their neighborhood. Pick one and talk to your server about the company. They may know someone or something that can help.
4. Take a deep breath and check your confidence level. Attitude is everything. Everyone is impressed by competence and confidence.
5. Once you feel confident enough to that you have something to say, it might be smart to make a ‘cold call’, i.e. walk through their door and ask to see the CEO or their HR honcho. A good outfit will route you to an assistant.
6. Use your time with the assistant to convey and validate your understanding of the company’s issues. Because they are at the assistant level, they will typically try to convey their best knowledge. They will also take your paperwork and contact information.
7. If you are uncomfortable with the cold call, write directly to the CEO. Stress your competence in the area you believe is under performing. It is always your responsibility to make the follow-up. Never leave it to them.
8. In negotiations, be flexible. If you start out as a contractor or temp, you will limit their legal and compliance exposure while getting a chance to demonstrate your skill set. If the chemistry is right, they would be foolish to miss the opportunity.
9. Smile and get to work. You have a challenge awaiting you, and the CEO is watching.

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Lately, the news media has started to highlight the idea of selling your collected “stuff” over the Internet as a way for seniors to realize some additional revenue. This variation on the traditional garage/yard sale does have some definite positive aspects. Obviously, it also has some negatives, which you should be aware of before posting your item.

The very first thing you need for Internet Retailing is access to a digital camera. One picture truly does tell a thousand words. Without a photo, nothing will sell near its value.

The three most popular sites for selling items on the Internet are -

1. Craigslist.org, which is targeted at given localities and is entirely free for 99% of its postings. This is the site to use if you are selling something that you don’t want to, or can’t, ship. However, a craigslist.org posting can specify that the item will be shipped and include a charge for that service. Craigslist.org transactions are typically cash deals. Your posted price is the sale price.
2. Ebay.com, which is targeted by country and charges a fee for every posting. Ebay has many more categories for your items, but you are charged for each posting in each category. Although it is not usual, an eBay listing can specify that the item must be picked up by the buyer. Ebay.com transactions are generally credit card deals, and you normally are using their credit card service, PayPal.com, which entails a fee of about 3% of the sale price. You also must define multiple prices for the item, i.e. an initial price at which the item will be first listed, and a minimum price, which is the least amount at which you will sell the item.
3. Amazon.com, which permits you to open your own store. It can establish an Internet retail “presence” for your ongoing transactions.

Positives -

• Using the Internet, you are able to reach a much wider audience than any garage sale will ever deliver.
• You have the facility to change your listing at any time while it is published.
• Anonymity is maintained throughout the selling process. Once a sale is agreed to, however, the buyer and seller typically identify themselves.
• These services involve no (craigslist.org) or small (eBay.com) costs.

Negatives -

• With many Internet sales venues, it will be necessary to pack and ship your items. The cost of this activity might be greater than you suspect. To be safe, you have to assemble your packing materials, weigh your items, and determine your actual shipping costs before you post the sale.
• You need to do some research on prices to establish a good, fair price. Pretend you are trying to buy the item and search for any similar items for sale. This can be difficult for unusual items, but it is required if you are going to be successful.
• If your items are used, remember that “beauty is in the eye of the beholder”. If you want your item to sell, you have to identify a price that will be attractive to a buyer. If this is less than the value of the item to you, don’t sell it!

Internet retailing is something of an adventure. In a real, but limited way, you are opening your own store. If you love it, you may become an amazon.com e-tailer. If not, you will at least clean out a corner of the attic.

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This is a new one on me. I always thought that the start date for Social Security was final. Once you made your choice of a start date you were locked into that decision forever.

Apparently, that is not the case. Just like kids playing a game or weekend golfers, you do have the opportunity for a do-over. During the past year, 71 people restarted their Social Security benefits clock. It may have cost them a worthy sum, but they were actually able to do it.

Don’t rush out to your Social Security Office just yet. The nasty fly in the ointment is that you first have to write a check out to Social Security for the total of all of the benefits you have received to date. No wonder only 71 people made the choice.

But it may be worth going through the exercise just to see what would be involved. Here is the drill.

1. Go through your records and calculate the total amount you have received from Social Security to date. That amount includes all benefits, including those deducted for Medicare.
2. Calculate how much additional you would receive from Social Security if your start date was two or three months from now. The Social Security web site does not disclose specific rates but does explain how rates are adjusted for different start dates.
3. For comparison purposes, calculate what the relative interest rate would be to achieve a similar return on that total amount of money you would have to pay. If it seems to make sense for you, then the next steps apply.
4. Download Form 521, Request for Withdrawal of Application, from the Social Security web site and fill it out.
5. Visit your local Social Security office in person. Their web site also will give you the location of the local office.
6. Social Security will process your request, and -

• your benefits will stop almost immediately,
• you will receive a statement from them specifying the amount you will have to repay,
• you will wait 2-3 months for the higher benefits to start being paid.

Obviously, this deal is not for many people. However, if you have some cash available, it may be worth reviewing the option. There is an good article in Kiplinger’s Personal Finance that describes the process in greater detail. It may not be a deal for many people, but it is nice to know it’s possible.

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Once we became eligible, my wife used to laugh whenever we went out to the movies. I would very firmly declare “two seniors” at the ticket window to secure the discount, while she would observe that we were grouped together with the children on the discount scale.

In many ways, we seniors are coupled with children. Both are subjected to age prejudice for the same reason, i.e. we are not viewed as major players in contemporary society. Our experience can be seen as passé, and our contacts have diminished through sickness, retirement, and death.

We also receive the same brand of prejudice, i.e. the “look through” brand of prejudice rather than the more hurtful “look away” variety. Because we are not viewed as players, we are ignored rather than avoided. It is a kinder form of prejudice, but it is still very frustrating.

How do you deal with this mindset during a job search?

1. To combat age prejudice, the first person you have to convince of its inaccuracy is yourself. If you allow yourself to focus upon, or be intimidated by, this barrier, it has achieved its exclusionary objective. Do not let it compromise your action plan.
2. Humor is the most effective weapon against prejudice of any kind. In a few quick words, it both recognizes the reality of that prejudice while at the same time removing the venom from its stinger. Remember how, in a presidential debate, Regan deftly responded that he would not use his opponent’s youth and inexperience against him. That classic zinger defused the entire age issue in that race.
3. In a job search, revise your resume to downplay the dates and stress the experience. You also may want to omit some early work and focus upon more recent activities.
4. Don’t be afraid to spend some time in volunteer efforts. These situations can present you with an opportunity to demonstrate your skills, make new contacts, and heighten your sense of self worth while producing a benefit for others.
5. As has always been the case in a job search at any age, contacts are your most important resource. Leverage your own as well as your children’s.

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