Don't Tread, or tax, on me in Retirement

Ever since I retired a little over two years ago, I've thought about where I would spend my time in retirement.  I was content to stay here in Michigan for the time being.  I say 'for the time being' because I knew that at the age of 70-1/2, when I must make mandatory withdrawals from my IRAs, I would not want to be here.  Why?  Because Michigan would tax that money.  And I do not like paying taxes for no services received (assuming I don't get locked up, where a good chunk of our taxes to the state are spent).

I really never understood people complaining about local property taxes to support local schools.  Yes, folks with no children may not see a benefit, but there is an overall benefit to the community as a whole by having educated members of said community.  No young men selling drugs and young women selling their bodies on street corners.  But I digress, as usual.

With a Michigan proposal to tax any part of my pension, I am looking at moving up the date of relocation.  Today's Detroit News has a really good map of states with no income tax and/or no pension tax. 

Prior to the tax on seniors proposal by the State's Governor, I considered Texas, where my oldest son lives.  Also on the list, because IRAs are not taxed, is Pennsylvania.  A Chicago suburb is also appealing, as is the rest of Illinois.  I enjoyed my vacation in Seattle, I can deal with gloomy weather, and it is close to Vancouver, another favorite vacation spot.  And then there is Tennessee, which I also like.

We seniors are not without choices.  We no longer need the three-bedroom homes with the higher property taxes.  Most of my disposable income is spent on travel and services, so sales tax is not a big issue.  And even if I did pay more sales or property tax, at least it is based on what I spend and becomes my choice.  Not a tax just because of what I spent my lifetime working for.

My only concern at this point is the ability to sell my home for what it would cost to rebuild it, not what some person looking for a real bargain is willing to pay.  Or I could do as my neighbors' have done and rent it out to a nice family.

Anyway, for those of you who may be in the same situation, here is a really nice map to go along with my other retirement living posts.

Tax-Friendly States

There has been a lot of mis-information out there about taxes on pensions and income.  Here is a site that has lots of really good information that can help you make decisions on where to retire.

If taxes are your concern, start here:  http://www.topretirements.com/state/most_tax-friendly_states_for_retirement.html  (Michigan is not on the list of best, but is on a list of worst overall.)

There is a lot of information on retirement and the comments from readers are interesting too.  Overall, the site makes a case for deciding what is important to you when making your decision.

Retirement Living

There is a lot of misinformation out there regarding taxing of retirement income.  Here is a really interesting website that talks all about retirement issues.  Read and judge for yourself where you are better off.  http://retirementliving.com/RLtaxes.html

I just received an email from a fellow retiree who suggests that he was born to be among palm trees and sunshine and suggested that I try it out.  We'll see.

Us Money-grubbing Seniors

So our new Governor thinks that seniors should be taxed on their pensions because they are 'reasonably high users of services.'  I read this statement online last night and have been trying to figure out what services I am using to excess.

I moved into my home in 1972.  I faithfully paid my school taxes.  I did not use the services until 1982 and have not used them since 1999.  Did I get more than my share for paying taxes over the last 39 years?

When I updated my 34 square foot bathroom this year, my township charged me $590 in fees.  For what?  They did NO work at all, other than sending some folks out to look and chat.  And not that they are the only ones to blame because they are only enforcing the state's construction code.

Police services?  I made one report after someone tried to use my credit card in Brooklyn, NY.  Fire services?  Luckily, none since I retired in 2008. 

I am really tired of being portrayed as a bully and a monetary drain on society.  One thing I learned when I was in politics is that just because some idea pops into your head, it is not always a good idea to voice it publicly.

Many seniors have something many young families do not have:  Disposable income.  We can spend it in Michigan, or if we are such a drain, we can take it and spend it elsewhere.  The choice of what policy is going to be followed is now up to our legislators.

The 'Bullies' Organize

Please join us for a rally at the Michigan State Capitol!

AARP Michigan is hosting a rally in reaction to a State Budget proposal presented by the Governor that calls for over $1 billion in tax increases on retirees, seniors and the working poor, while cutting quality-of-life programs and services by $1.2 billion and giving businesses a $1.8 billion tax cut. AARP believes this budget is an all out attack on older Michiganders. We believe what our members are getting in this plan is a much higher tax bill and reduced services. This plan would raise taxes on 1.1 million seniors in exchange for a business tax cut, while also reducing spending for public schools and universities, police and fire fighters, local road repairs and other vital programs and services. This is unfair and unacceptable!
Join us!
It’s Not Fair! Rally

Location: Michigan State Capitol Building, east steps
Corner of Michigan Avenue and Capitol Avenue
Lansing
Date: Tuesday, March 15, 2011
Time: 11:00 am to 1:00 pm

P---ing off the Seniors

This morning's newspaper talks about the Governor's budget for the coming year.  There has been a lot of talk recently about the exemption that seniors enjoy on the state income tax.  Well, I know what I will do if that changes.

When I was Treasurer, I spoke with a woman about her property taxes and I asked her why her house was shown as a non-homestead, meaning she was a non-resident.  She said it was financially beneficial for her and her husband to be Florida residents, rather than Michigan residents.

I have an article from Forbes.com that I saved on my computer regarding states that are advantageous to seniors.  Here is an excerpt:

... even as they slapped a new tax on hospitals, raised dozens of user fees and eliminated a low-income tax credit, Georgia legislators passed income tax relief for one group: well-off retirees. For residents 62 or older, Georgia already exempts from its 6% tax all Social Security and $70,000 per couple of income from pensions, retirement accounts, annuities, interest, dividends, capital gains and rents. But in 2012 the exemption for couples 65 and older will rise to $130,000, and by 2016 all their retirement income will be exempt--a break Governor Sonny Perdue championed as a lure for well-heeled seniors.

If you're looking for a domestic retirement tax haven, Georgia is hardly the only place worth considering. Seven states--Alaska, Florida, Nevada, South Dakota, Texas, Washington and Wyoming--don't tax personal income at all. New Hampshire and Tennessee tax interest and dividends but not other income. The rest of the states have broad income taxes but give old taxpayers breaks, some quite generous.

Michigan already taxes IRA withdrawals, while some other states do not. 

If I moved to Texas where my oldest son lives, I would not have to deal with snow on a daily basis in winter.  And I could visit my other sons up here during the heat of July and August down there. 

So, let's think about this.  All of our young, professional folks are leaving for other states.  Our seniors who have a comfortable income are leaving for other states.  What does that leave here in Michigan?  Do we become the welfare state for those who have no place else to go?

As they say, it's all about the money.

It's Official

Twenty-six months after my retirement I have made it official:  I am RETIRED.  OK.  You may be thinking that you already thought I was, but now the Association of Government Accountants (AGA) has 'officially' acknowledged my 'retired' status.  Let me explain.

My CGFM, Certified Government Financial Manager, designation comes from the AGA.  Every two years must must attest to having attained eighty hours of continuing professional education (CPE) in order to keep the designation.  In January of 2009, having the hours under my belt, I paid my dues and continued my certification.  I actually thought for a time that I would return to the work force if the right position came along.  But even when positions looked promising, pay and benefits or working conditions did not.  Seems like a lot of distressed communities are the ones looking for help and aggravation was not in my plans.

So, this year when my dues notice came, I asked to be placed on the 'CGFM-Retired' status.  I had to assure the AGA that I had no intention of returning to the field of public finance.  Certainly for now it is true and if there was a reason to re-enter the field in the future I am sure some family member will take action to straighten out my thinking.

All of this came about in a week where we had Regis Philbin, age 79, decide to retire, saying he should have done so years ago.  And today an announcement that John Dingell, age 84, will run for office again in 2012.  What part about leaving doesn't he get?

For me, retirement is just where I want to be, though a warmer place to be retired would be great, too.

What a Ride

It has been a hectic nine days since I last wrote this blog.  I've had trips to Ann Arbor and Lansing for meetings, fulfilled two of my volunteer jobs, worked a poll for the election of a successful candidate, made a trip to the emergency room with chest pains, and survived another power outage.  Along with just running my normal errands and keeping my house and yard in shape for winter.  No wonder I had no time to write.

During this past week, two gentlemen who I've known and had dealings with on government committees told me they were retiring at the end of the year.  I have great respect for both men and their wealth of knowledge when it comes to government.  Taking their knowledge with them to retirement will leave a void both at the company for one and in State government for the other.  (I also know two other long-term State employees leaving at the end of the year.  Can you spell BRAIN DRAIN?)

In conversations with them over the past few years, both have mentioned at one time or another that they do not know what they will do in retirement.  Do?  I could give them some of my list of items.  I have a longer to-do list now than I had when I was working full-time.

Maybe it is because I am home that I see more things to take care of, but I doubt it.  There is also the 'fun factor' of things to accomplish while I am still able.  Places to travel to on my 'must-see' list.  And there are the culinary classes at Schoolcraft in the continuing ed program.  This semester it is a Friday night series on various food preparation techniques and in a few weeks a class on making French tortes.  A classmate suggested last week that I enroll in the full-time program.  Right.  Who has the time?

Besides, I have finally reached the point in life where I can sit down and read a book or watch a movie without feeling the overwhelming need to get up an do something productive.  And when you reach that point, retirement becomes a real treasure to enjoy.

Yes, You Can

Interesting headline in Sunday's Detroit Free Press:  Will I ever be able to Retire?  The fourth sentence of the article begins with 'Never much on saving, these Americans in their 50's and 60's...'.

Whoa.  Fifties and sixties?  The children of depression era parents?  The ones who told us to eat up because there were starving children in China?  (I know, it never made sense to me either.)

If there was one thing my parents taught me, and so it seems my husband's parents also, was that you need to save first and spend later.  And if these people were not into saving much, then they couldn't have lost too much in the economic downturn.

No, I am not beating up on folks who have lost pensions and seen their portfolios dwindling.  I am only wondering why so many felt the need to spend so much all their lives.  I've lived long enough to ask myself many times, 'How do those people afford their lifestyle?'  I assumed it was either that they spent every penny they earned (as pointed out in the article), or they over-spent and used their credit cards to the max.

When you are young, retirement seems far off into the future.  It sure seemed that way for me.  I left my job with the City of Detroit before I vested my pension.  It did not seem like such a big deal back then.  But if all works out, retirement day arrives and you want to be ready for it. 

I have friends who say they can never afford to retire.  Well, it is not how much you make, but how much you spend.  If you have been relatively frugal in your working years, the transition to retirement is not so bad.  If you have lived 'high on the hog', as they say, well, you may not be able to retire.  Ever.

There is life after retirement, but you need to plan for it when you are twenty, not sixty.  No sense in 'keeping up with the Joneses', if they are never going to retire. 

Knowing When to Leave

Last Friday I attended my last meeting of the Legislative Committee for the Michigan Government Finance Officers Association where I presided as the Chairperson.  I know that all of us know when it is time to leave and last year I was pleased to have someone ask to take over the chairmanship this coming year. 

I have been on the committee since 1994.  One of my first accomplishments was the rewriting of the state investment act which became a new law in 1996.  From there it was writing new laws for investing money to prefund retiree health care, allowing electronic transactions, and participating in the re-write of the state Municipal Finance Act and the Uniform Accounting and Budgeting Act.  It has been a great experience.

After serving as Vice-chair for several years I took over the Chairmanship of the Committee in 2001.  But it turned out that most of our committee successes were behind us.  Say 'thank you' to term limits.  It became harder to build relationships with legislators who would sponsor bills.  It meant more days spent waiting for a hearing than actual action on a bill.

We spent a lot of time Friday discussing where we have been on our committee and where we hope to go in the coming year.  I will present an update at our September Conference and then retire to a seat as one of the 'old-timers' on the committee.  It has been a wonderful run, but now it is time to let someone else set the pace.  It's all about knowing when to leave.

Over-booked - not just on airlines

Do you ever feel that your life is spinning out of control?  This last week would have been bad enough if I just had to catch up from my trip out of town, but then I booked too much 'stuff' on top of it.

Granted that Monday was a problem since I had to replace a tire and had an unscheduled meeting pop-up in the middle of the day.  I rescheduled a previously scheduled meeting to next Wednesday to make the new meeting, or so I thought.  I was wrong and ended up with a committee meeting in my home on Wednesday  while my lunch meeting guest was sitting alone in a restaurant.  Oh, well.  To complicate Wednesday, my gardener was here to work on the river bed, plus I had an evening meeting to boot.

Thursday is my volunteer day at HFWB.  Then I had to come home to prepare for my committee meeting in Lansing on Friday.  Alas, rushing around meant no formal agenda was sent out by me.  Well, we were brainstorming anyway.  (Someone suggested that the state needs an emergency financial manager.  Seems to be not such a bad idea.)

Friday would not have been so bad if I had set my alarm clock for AM instead of PM.  DUH!  I got there just a few minutes late and, fact is, no one really noticed I was late. 

If a friend had not sent an email late last night saying she was sorry she would miss me at the League of Women Voters luncheon today, I probably would have forgotten to attend.  And to top off my week, one of the committees I volunteer for complained that I am never around when they want me to be.  Well, all I can say is 'tough'.  What part of retirement do they not understand?

So, I am off to a luncheon and a talk by Philip Power from the Center for Michigan.  If you have never visited their site, give it a try.  You may not agree with all their positions, but they do make you think.

Being About Nothing

When I tell anyone I have a blog, the first thing they ask is, 'What is it about?'

If the person is someone I used to work with, they are wondering if I am writing about Township politics.  Hah!  I retired for a reason.  But, I have written several posts about politics (12 at last count), and will again I am sure.

My answer to the query, then, is that this blog is really about nothing in particular.  Think of it as a 'Seinfeld' blog.  I write about whatever 'pops' into my head. 

Sometimes it is about a book I've read, a movie I've seen, or a newspaper article (12 again).  If I write about my family and home (11), I am sure to hear about it.  These areas seem to occupy most of my space and time.  See, no posts about work.  No job. 

It is what retirement is all about.  It has now been eighteen months of pure pleasure.  Oh, I still have my 'committee work' with the Michigan Finance Officers and the Department of Treasury and my volunteering at Henry Ford Hospital and the Library, but I never think of it as 'work' in the sense of a job. 

And while these posts may all be about 'nothing', my life in retirement is really about something very important.  Living.  We all need to learn to do more of it.

01/01/10 - Day one.

I retired on November 21, 2008. I have spent a good deal of the time since then answering the question (now a big pain in the you-know-what): 'So, how do like retirement?' You would think I had either just returned from experiencing an alien abduction or at least had been the first person ever to survive retirement. EVERYBODY wants to hear the answer.

It's retirement. I love it. I can do what I want whenever I want. Or not do it, too.

When I retired, a long-time friend (that's you Debbie) suggested that I start a blog. Yeah, right. Like I had time to do this. Then I would be wondering, just what DID I do last Friday? It was Friday wasn't it?

So, now that my days and adventures all run together, I have decided to write a blog each night about what has occurred during my day. Sounds boring, I know. And I'll probably not even remember half the stuff.

Today was New Year's Day. I made French Onion Soup and Quiche Lorraine. Both recipes straight out of Julia Child's first cookbook. And the first time I ever made any of her recipes. While cooking I also watched 'The Man from Laramie', Criminal Minds, and 'The Last Days'.

Watching TV, movies and cooking from scratch are all things I didn't get to do enough of when I was employed. Ah, living life. C'est bon.