Quick Hits for November 10, 2009
* President Obama has been very careful in using the Bill Clinton card both in the campaign and as President. He used Clinton well in N. Korea, and now he is pulling Bill out to talk to Senate Democrats about health care. If anyone knows the impact of failing to pass health care when they have promised it to the public, it is Bill Clinton who saw Democrats lose the majority in 1994 as a result of Democratic infighting and disorganization that failed to make many major policy strides in two years as the majority party. Senate Democrats need to take that lesson to heart and pass something that they will be willing to face the Democratic and Independent public with. They should stop worrying about bipartisanship as much as doing something that will make Independents say "this really helped my family." If they can do that, they will see gains in 2010.
* It appears that abortion may yet again be a key issue on health care as several Senators in the Democratic Party have come out saying abortion restrictions must be in the bill, and others saying they must be eased in the bill. I can understand both sides of the issue because the health care bill deals with Viagra for men, but doesn't take care of an issue that is both constitutional and very important in terms of women's rights because of some moral objections from groups on the right that tend to be hypocritical about morality while insisting that it be imposed on others. Having said that, many abortions are done through clinics rather than health care anyway, which means that wouldn't change. While I don't like the imposition of someone's morality to infringe upon someone else's medical rights, it is more important to get through a good public option. Don't let the abortion debate derail something so important as health care reform.
* Sarah Palin returned to her focus on "death panels." I just don't know how anyone takes Sarah Palin seriously. If she wants to see a true "death panel," she should talk to actuaries for health insurance companies that put the caps on benefits, and choose which procedures are and are not covered. Maybe Sarah can WOW those who simply don't know much, but she sounds silly beyond imagination for anyone intending to be taken seriously as a Presidential candidate because she simply has little to no grasp of policy or how the world actually works.
* As the Baby Boomers prepare to retire, they are facing questions of what to spend their money on, and how to best spend their retirement accounts. Do you take a small account in an annuity or do you take the lump sum? Do you put extra money in your 401k or do you cut down your debt? My parents are facing that problem with a small retirement account that can be put into an annuity or taken out as cash, so the question is what should they do?
As always, eliminating debt should come first. Why? First, because interest rates on debt are often higher than rate of return on investment accounts. That means you lose money by having that debt, especially if it is credit cards because their interest rates have shifted even higher for many people up to 30%. Kill the credit cards, keep them for emergencies, not for daily expenses. Second, as you hit retirement, you hit a fixed income. That means every bill you can eliminate frees up money so you don't need as much money as inflation hits over time.
It is that very logic that puts forth the idea of putting money into home improvements such as converter boxes, solar panels, wind turbines, waterless water heaters, and so on, as much as one can. Why? Same logic, energy prices will continue to rise, so the more you can cut your energy uses, the less your monthly bills will be, and the easier you will be able to withstand summer and winter energy spikes. In the case of my parents, their annuity would be about $250 a month, but putting that into paying off their credit cards AND putting in alternative energies would cut substantially more than that off of their monthly budget, and that number would grow as energy prices rise.
One little trick though, make sure you pay for those home improvements in the same year you take the money out of your retirement account. Why? Take the tax credits and deductions for home improvement and green energy to minimize the taxes you will have to pay for taking out such a large lump sum.
Either way, whether it is pre-retirement or during retirement, finding ways to minimize costs while preparing for a fixed income is a good move. And if you really want to continue to work for yourself to save money in your retirement years, see if you can beat 50% off of your groceries and toiletries with coupons, sales, and price matching shopping games. That is another great way to cut your monthly costs that too few utilize.