Upside Down

I want to make it clear up front, I am a procrastinator when it comes to spending money. I will always wait until the last possible moment to put out the cost for something. I squeeze pennies like an old lady, which I am. I even have a coin purse to catch them all as they fall out of life at me. I am a long time/term financial planner when it comes to my money.

For awhile, I was the millionaire living next door. You would never know it looking at me. But I have been retired for eight years now, and over time, my nest egg trickles away.

I have decided to move my so-called 'retirement' money out of the stock market. Bit by bit, I have been taking the 401(k) money in monthly separate but equal payments until the very last drop is gone. This is taxable income. So once a year, I do a lump withdrawl, too, to cover the state and federal taxes and to give me a one-time lump sum for liquidity and for my annual 'unforseen events' budget, generally my lump goes to paying off my Visa bill.

I have a managed financial account for the 401(k). The advisor called me for my annual checkup a few days ago. Poor man is clueless. He asks all the wrong questions. I had to make up my mind whether it was my job to train him, or just be curt and monosyllabic in my responses to his inane inquiries. I chose curt.

Well, anyway, this is all leading up to two decisions I have pending. I have been stalling majorly on the first one.

This decision involves investing about $12k into the 'bonus room' and getting a kitchenette installed. It will be about $4.7k for the cabinetry and about $5.4k for the labor to do the plumbing, electrical and installation. Naturally these are estimates, so I have to keep a budget of another $2k for the 'just-in-case' emergencies that always crop up in projects like this. I paid to get the measurements and plans done and now they are awaiting my 'go' decision.

Or, I could just continue with what I am doing -- using the bathroom sink to wash dishes and having my microwave oven on a card table next to the new refrigerator. The refrig is not connected to the plumbing yet so the ice and water functions in the front door are not working.

The downside of this is there is not toaster oven set up, it is buried someplace in one of the 40 'kitchen' boxes still stored in the garage. There is no counter top to make my cheese and pickle sandwiches on, and no pantry cupboard for the canned soup and boxed crackers.

Doing nothing is the cheap solution.

I have the $12k lump sum for the kitchen ready now. I know that if I procrastinate, this sum will slowly slip away into the daily miscellaneous crap and garbage (MC&G) of everyday spending. This will happen no matter how much I like to see, and savor, this sort of level of balance in my credit union savings account.

But meanwhile, I am still thinking about it and not taking action.

I have tried to analyze what is holding me back. I am living downstairs in my son and daughter-in-law's house.

Is the pull holding this decision something to do with the fact that I am investing in 'someone' else's house? If I spend this money, I can not recuperate it from the sale of the house. It is just 'consumed' money to make me comfortable, not a capital improvement financially benefiting me.

But on the other hand, I am not paying utility bills, so I am getting a 'ride' here for my consumption of electricity, gas, water and garbage. Let's say that is a $300/month subsidy. That is $3.6k/year. In a little over three years it would add up to the $12k. Should the payback for their subsidy be a significant home improvement, one that contributes to the subsequent saleablity of their house?

I know I am not supposed to be doing this, but I also think about the fairness of the distribution of my final estate amoung my three children. If I am off spending money on an improvement that would have a long-term benefit only to my son's family, how is that fair to my two daughters?

My daughters would beat me over the head for "making do" with subsistence living in a short-sighted effort to be 'fair' with my own money. So it is dumb for me to think this way, I know, but I still do it.

Another way I could be thinking about it is this way -- I lived in a house. I paid it off. Then I sold it. I now have to make certain investments in the house I am living in to ensure a certain minimum quality of life. MY LIFE. It is comfort I am giving myself out of the profits of my home sale. Why the hell not?

So, I should quit dragging my feet and go give the kitchen people some money tomorrow and get this show on the road, eh?

The other decision that is pending is the decision to start taking my Social Security early (age 62). If I do this, my monthly benefit is only 2/3rds of what it would be if I waited until my 'normal' retirement age of 66. The baby-boomer sliding scale pushes my retirement age up a year from the normal 65.

Long term actuarials will tell you that to get the biggest bang for your buck is to take the lesser money for longer. You are basically betting that you will live a long time. On the whole my health is good. Asthma, weight and a slight brush with curable cancer are the only dark shapes on the horizon.

So, come mid June, I think I will be signing up for my early Social Security monthly payments (~$1k/month now vs ~$1.5k/month if taken later).

Another pusher to take it now is this -- I have been retired for 8 years. I have not contributed FICA for 8 years. If I wait another 4 years, that will make it 12 years since I contributed. Then I may not have the same eligibility (60 straight months FICA contributions in the last 10 years).

These are the days of one's life. They are consummed with thoughful chewing -- this way and that way. An intelligent person realizes what she is doing, quits her stalling and gets moving on with things. Step by step, it will all get accomplished, one hopes.