Downsizing in retirement, my own observations, Part 3: rent or own?

I wanted to follow some followup on the questions I posed May 13 about seniors qualifying for rental housing or condo purchase after selling an oversized house.  Many of the issues I had to “preview” relate to the fact that I was living in a 1949-built house owned legally by my (late) mother’s trust, not technically by me.  But I do have the powers as the sole acting trustee.

I’ve had conversations with two separate high-end modern high-rise properties (both built in the 70s-80s) and both told me that they would rent to a retired senior who could demonstrate more than sufficient assets in a checking account (one that will not lose principal other than from making actual payments) to cover the term of a lease.  Lease amounts tend to lead to lower monthly rents for longer terms, but rental prices are set algorithmically daily based on supply and demand in a specific geographical area;  most corporate large landlords use these automated processes to set rents.

There is a possible risk that a lease would not be renewed (as if the renter could not come up with the same reserve guarantee for a renewal, or if a building were sold for condo, or if market rent spiked suddenly).

I did wind up purchasing a condo for about one-third of what the house sold for, even allowing for extra expenses (and replacing a heat pump compressor immediately on me).  Mathematically, it is likely that the remaining gain in liquidity will last longer (allowing for property taxes and condo dues, and some repairs) than a larger amount would spent entirely on rent.

As I indicated on my (personal) “Notes” blog in a recent post, there can be restrictions on how the liquidity gain in a trust (irrevocable in the name of a parent or ancestor) is spent.  Some trusts discourage the sale of an estate house (on the theory it should stay in the family) or try to prohibit downsizing real estate holdings unless there is a specific special need on the part of a trustee or beneficiary.  I found that a condo purchase for cash in the name of mother’s trust seemed to be OK with everyone (at one time I wanted it to be in another trust in my own name only).  This might not have been the case had a mortgage been necessary.  (A reverse mortgage might be allowed.)

Special needs are met in a variety of senior housing developments for rent (sometimes purchase).  Some offer meals and have HUD-subsidized rents.  Typically there is a qualification formula that includes a specific percentage of the person’s total assets (I think it is 0.8% per year right now) to count as income.  This arrangement is certainly subject to the whims of policy (Congress or the administration).  There are other high-end properties (like Goodwin House in northern Virginia) that require a large deposit to rent, but then allow move-in to an assisted living unit when that becomes necessary.  Use of trust money for the trustee’s own special medical needs sometimes requires medical supervision, monitoring and approval.

The general lesson from all of this on trusts is that they are “convenient” for someone inheriting an estate in usually avoiding probate court.  But they often restrict how liquid assets (beyond the distribution instructions to other family inherit-ees), are used, and impose fiduciary responsibility on the trustee that discourages further distributions (other than providing some income to beneficiaries) until after the trustee’s own death.  They usually are quite serious about the trustee’s being able to handle to unpredictable possibility of his own needs (like stroke, Alzheimer’s, etc.)

There was somewhat of a reversal in the expectation that, after closing on the sale, there would be a period of time before I picked a property to buy.  In exchange for a higher initial sales price, I accepted an arrangement where I had only three weeks to leave after closing. But I also picked out the condo much sooner and there was an arrangement to make sure funds would move properly in the split settlement with two title companies.  This agreement could not have worked in a situation where a senior goes on a waiting list to get into a HUD-subsidized unit because of a special need.

There was less time to look at a large number of possible purchase properties than I had anticipated in my own mental “preview”. (This excluded looking a possibly cheaper properties in other cities — unless I went through the complications of living in an extended stay place for a while and keeping everything in storage.)  You normally can’t look at a (used) property without a realtor making an appointment and generally need to have a “done deal” on your own sale first.

Condo purchase did encourage a condo property policy (which is slightly more expensive when a trust owns the condo) and security system installed by the cable company.  Once again, a very distant reflection of the network neutrality debate:  telecom companies should be able to tailor specific packages and service add-ons for individual consumers as long as they allow all lawful Internet content to be available for those who want it.

(Posted: Thursday, Nov. 30, 2017 at 12:30 PM EST)

 

Downsizing in retirement, my own observations: Part 2: home-based business issues

One of the concerns I had prospectively and when in “preview mode” about selling the estate house and specifically buying a condo, was the issue of running what is legally viewed as a home-based business in the condo.

In the house, I had a normal county business license typical for “writers” and a sales tax license from Virginia, so that I could legally sell copies of the four books I have authored. While most sales are from Amazon, my cooperative publisher expects me to be open to buying copies of books and either wholesaling them to bookstores (especially independent) or retailing them directly to consumers.  That s why I have a payment portal, however used, on another blog, with SSL encryption.

The business licenses and sales tax licenses required the connection of my residence address with the county and state (even a UPS store would not do;  it had to be a location where business really could be conducted, either an office or a home). Before closing on the sale of the house, then, I had to cancel these licenses so that the old address was no longer attached to the house I would sell in any public record. Actually, I found no evidence that title companies or buyers try to check for this.  However, as a I.T. person familiar with relational databases (SQL) and “direct connect” or replication processing, it’s all to easy for me to imagine how this could start.

The same question will come up in my new location, for me to resume the capacity to “sell”.  Generally, condo associations have rules that can restrict home based businesses.  High-rise condos (and probably coops) may tend to be stricter than townhome developments, and may well have rules stricter than the local county or city.  But homeowners associations sometimes restrict businesses in gated communities even where the land is individually owned.  I covered this problem in August in some detail on this set of legacy posts.  But generally, most of them are concerned mainly with businesses that cause consumers regularly to come to the property, or which require physical changes to the property or signage on the property.

It is common for condo by-laws to state that units are for residential use only. Sometimes they forbid “vocational” or “professional” use, or “exploratory”, which I am told means that the owner doesn’t live in the unit but uses it only for business.  Some have clauses banning non-profits, fund-raising organizations (like for political candidates) and religious organizations from operating from residential units (and some suburban cities have townhome developments set aside by zoning specifically for these purposes).  Generally, they don’t have a problem with a writer or blogger simply using the Internet from the unit, as long as everything is lawful (although I would wonder if the blogger was involved in extremist activities).  I would presume that in most cases telecommuting to work would be all right, as would home-based customer service jobs that require only a normal PC and stable Internet connection.

Condos vary on their policy on short-term rentals like Airbnb.  Generally, large suburban complexes will ban hotel-type renting;  but expensive condos in trendy areas of large cities are often built with the idea that such rental use is allowed and even encouraged;  these units are popular with some celebrities. It can be difficult to “catch” an owner violating a ban, but recently some condos have begun using automated tools to scan the Web for violations.

Still, it may be worth looking in to finding an expensive “office” in a small town as an official business address, and possibly try to do so in combination with other authors or small business owners.  It wouldn’t be necessary to go there often.

Another possibility is to conduct business at events in other cities, as with my recent trip to the Miami Book Fair.

In my “previews” I did talk to one rental agent for a typical high-rise apartment (rental only, not ownership). They did not have objection to “quiet” home based businesses that are otherwise legal in the county or city. However, I can imagine circumstances where a controversial tenant is forced to leave if he or she is perceived as attracting danger to others in the unit, but I have not heard of any specific cases of this.

(Posted: Friday, Nov. 24, 2017 at 11:45 PM EST)

Downsizing in retirement: My own observations, Part 1: decluttering

I am nearing the completion of my downsizing, selling and moving out of an “estate” house and into a smaller condo.

I approached this subject with a posting here May 13, and said this would be an OJT experience.  I tried to preview the issues that could come up, and indeed there were a lot of unexpected twists.

It will take several postings to cover in detail some important points of what I learned from what actually happened, and some of this will be discussed with more specifics on my “doaskdotellnotes” blog where I talk about my obligations under my own trust.

I did want to hit one point hard tonight: the value of decluttering before downsizing. The house had a lot of unnecessary “stuff’ (kitchen related) that my parents had used.  I have also accumulated a lot of books and CD’s over the years, partly before my life played out largely before you could put your collections in the Cloud in digital format. I also had a lot of personal papers on various matters (like substitute teaching, and various matters concerning the original publication of my books).  Finally I had a lot of excess clothing.

 

 

What struck me was the amount of manual labor required to pack (by the moving company) and to haul away the junk (by junk removal companies, which I had really started before, especially with excess furniture).  All of this was on top of some furniture donations through the realtor to hurricane victims.

I remember on some volunteer assignments how much effort goes into sorting used clothing for distribution to clients in various community assistance and service events.  It takes a lot of time to deal with an unneeded item, either to give it away to someone who would really need it, or to dispose of it safely.  It does add perspective on volunteerism, which  may be more of a matter of hours and time than I used to think.

(Posted: Thursday, November 16, 2017, at 7L30 PM EST)

Humans belong to groups (more the way dogs do, than cats); the paradox of distributed consciousness and mandatory competition

Okay, one of the moral imperatives I get bombarded with is to join a cause larger than myself.

And, I can’t claim to be part of Tom Brokaw’s Greatest Generation (but neither can many young adults in the not so wild West today).

In fact, as an “unbalanced personality” in the world of the Paul Rosenfels Community (or the Ninth Street Center of the 1970s through 1991) it’s very important to me to follow goals that I choose and develop myself.

That’s one reason why I don’t sign up to brand myself with “other people’s causes” or to enter contests, say selling pies for Food and Friends (instead I buy more than one and use the extras for potlucks).

And I could say I wish I had accomplished more in my life in individual sport – chess, which deteriorated for me somewhat once I became a self-published author and blogger.  (I do admire Magnus Carlsen, but so does Donald Trump, from what I hear.)   In chess, only your own mistakes can beat you.  Giving away the opposition in an endgame isn’t the same thing as hanging a slider as a MLB pitcher.

But, we always belong to something (as Martin Fowler maintained in his 2014 book (“You Always Belonged and You Always Will: A Philosophy of Belonging”).  Some of these we don’t have a lot of choice about.  For example the family you are born into, or religion, or nationality, or tribe.

As we become adults we hopefully make progress in choosing our own connections, but we often find that once we do, we need to respect to “social hierarchy” of our new allegiances, however benevolent their intentions at the outset. That’s often hard for me to accept.

But “groups” serve a purpose.  They give individuals support and backup, so they don’t remain accidents waiting to happen. (Marriage does that, of course, which is one reason, as Jonathan Rauch argued in the 1990s, gay marriage became important to LGBTQ people.)  And they give us purposes larger than ourselves.  But, these purposes come at the partial cost of loss of some independence in fine tuning our own beliefs or over-analyzing the logical inconsistences in positions taken by groups to benefit their members.  An expectation that singleton individuals with some privilege (like me) will report to some sort of structured community engagement might be viewed as a major “eusocial” tool against inequality.

In practice, individuals share some of the moral responsibility and consequences, sometimes very personally, of the actions of the groups to which they belong, whether by complete free will or not.

Yet, individuals seem to find some relief in the prospect of a little “distributed consciousness”.  We know this happens in other animals (even dolphins), although the modern idea of IIT or “integrated information theory” may make this hard to see.

Before (like on June 6), I’ve noted that, in the larger space-time sense of modern physics and string theory, after passing of an individual’s life, the information set produced by that life still exists indefinitely.  Is that the basis for a “soul”?  But if there is some sort of distributed consciousness at the group level (even family lineage), does it have access to this information set?

Music may provide a clue to “cosmic consciousness”, more so than visual art (even images of danganonpa dolls) because it requires the brain to span time.  Music seems to provide an alternative outlet for the “emotional body” when it engages the brain in its own logical progressions, from Back to Beethoven to the romantics and moderns.  The controversy over how to end Bruckner’s Ninth Symphony (which of two competing concepts did Bruckner intend for his coda for all his composition?) seems to engage the heart as well as mind.  What, then, to make of the group experience in music like, say, hip-hop on the disco floor, or songs of praise in church, particularly singing the same verse in unison over and over again to get some sort of religious experience.  There are other ways to caste the experience of sound and music, like hemi-sync at the Monroe Institute, which I have not really experienced yet.

There’s one other ancillary point here:  the Paradox of Involuntary Competition. That is, once you join a group, you compete with others in the group for status, even if your purpose was “functionably” communal (Nov. 6)    That could lead the powers-that-be in a group to want to keep it small and exclusive (like those “closed talk groups” at the Ninth Street Center in the 1970s, an interview for which led to a major personal confrontation in October 1974, so shortly soon after I had moved into the Village).  But it’s just as often that the leadership wants the group to be so valuable that everyone else must try to get in and play – the whole “no spectators” problem like in the movie “Rebirth”).  That ultimately can compare to the model particularly for left-wing authoritarianism. There’s a curious analogy to the problems I had in the dorms at William and Mary that fall of 1961. I would have thought at other boys – most of all my roommate – would be relieved that I wouldn’t provide any romantic competition for girl friends .  That general expectation may have been diluted by the fact that at the time the male student body was about twice the female. But the real point was that the less secure boys (about their own “maleness” which does not always equate to masculinity, even in the eyes of Milo Yiannopoulos) wanted me to provide the reassurance that there really is someone (female, of the opposite sex) for everyone, that everyone can have a family linage and live forever however vicariously.

(Posted: Wednesday, November 8, 2017 at 9:30 PM EDT)

After the Equifax breach, we need a policy solution for identity theft

While CNN Money has a pretty mainstream article of advice on the Equifax hack here, a supplementary article by David Goldman lays it on the line, “What’s the worst that can happen?”

The absolute worst might be being framed for a crime, like sex trafficking or child pornography.  In most circumstances that a novelist can imagine, it would still be pretty easy to prove that physically the culprit couldn’t have been “you”.  There are a variety of other outcomes, including job loss or denial or a mortage or lease. For millennials, the risk can extend for decades.  For seniors, it’s probably very minimal.

One comment that gets made by social conservatives particularly (and some libertarians) is that you are ultimately responsible for your own reputation, no matter what, because you live in a society that offers you the benefits of civilization.  I can remember an employer warning us about this in the late 1980s when we suddenly had to pass credit checks to keep our jobs.   I can remember that ten years ago there were prosecutors who looked at finding child pornography on a personal computer as an “strict  liability offense”, although since they they have accepted the idea that malware can put it there. This seems to be a very disturbing philosophy that transcends the plain meaning idea of the law normally, and that most of us cannot live with (especially those on the margins).

Maybe maintaining credit freezes would protect everyone, but it sounds pretty impractical in the long run.

So I think that in the identity theft idea, we need a new policy solution.  I had outlined an idea back in 2006 using “National Change of Address” at USPS, which I had worked on in Minneapolis on my own career back in 1998.

Now I would say, the credit reporting companies should develop the idea of a secondary social security number verifier, which a user can add to her file, and which could not have been hacked yet because it does not yet exist.   I would not be so comfortable with letting the Social Security administration run it. Get some security companies (not Kaspersky, in Russia) to help develop it.  It could be put into two-step verification required to pull a credit report, although it so it would need to be tied to sim cards and not just to phone numbers, which can also be stolen.

(Posted: Sunday, September 17, 2017 at 9:15 AM)

“Stability” really matters, for people who already have capital (earned or inherited)

OK, I am “retired”, and I “depend” on past accumulated wealth, much earned but some inherited, to keep these blogs going because they don’t pay for themselves.  They don’t require much money (or Piketty-style capital) to run in the grand scheme of things, but they depend on stable infrastructure, security, and stable economic and personal circumstances for me.

Yes, stability.  And judging from the “outside world” events of recent weeks, it doesn’t sound like something I can count on as much as I have.

For most of my adult working life, I was very much in command of the possibility for my own mistakes to undo me and possibly end my stable I.T. career (as with bad elevations into production).

But early in my life I was forced to be much more aware of eternal demands by the community I was brought in.  Gender conformity had to do with that.  Then came the military draft and Vietnam.  There was an expectation of eventually having a family even if running a gauntlet that could expose me to some personal fair share of community hazards.  This had much more to do with my own “mental health” problems in the age 19-21 range than I probably realized (including a brush with nihilism in 1964).

It is true, of course, that my employment could be affected by outside business events like mergers and takeovers, but in my case these actually worked out in my favor.  And earlier in my work life I was concerned about staying near a large city (New York) where it would be easier for me to “come out”;  the energy crisis was actually a threat to my mobility, as was potentially NYC’s “drop dead” financial meltdown when I was (finally) living there.

So it is, in retirement.  If you have accumulated wealth, you want the world to be stable so you don’t have to watch your back, and face sudden expropriation because of political deterioration (maybe combined with a natural catastrophe).  You want to believe if you pay your bills, make good choices, and play by the “rules” you will be OK.  And you find people knocking for attention your life, and you have to deal with the knowledge that they didn’t have the situational stability that “you” did.

It’s possible to find one’s life suddenly becomes a political bargaining chip. For example, Congress could try to means-test Social Security recipients (even current one) as part of its debt (and debt ceiling) issue.

I have to say I do have a gut reaction from “extremists”, whether associated with Communism (North Korea) or radical Islam, who make threats that sound personal, as if they saw someone like me as a personal enemy.  I do understand the racial contact, that some people will take statements (hate speech) made on the alt-right that way, also. But combativeness has become a problem that I had not anticipated throughout most of my working life.

It is true, also, that the most extreme scenarios from foreign enemies could reduce me personally to nothing.  The conservative Weekly Standard, after 9/11, liked to use the term, being “brought low” because of the resentment of others.  In the North Korean threat, there are many nuances.  The right wing talks about EMP, and the major media refuses to mention it.  It could become a real threat, but my own probing of the utility world suggests it is making some progress in making transformers less vulnerable (to “E3” threats, also posed by extreme solar storms).  (The power companies won’t say exactly what they are doing, for good security reasons.)  Personal electronics, cars, and data can face threats from a different mechanism (“E1”) which actually might be easier for an enemy (including retaliation by the DPRK) to pull off.  This is a developing topic that the major media just doesn’t want to cover yet (outside of cyberwar, which is better known, as with the psychological warfare implications of the Sony hack).

I have to say, too, that for one’s life to come to an end out of political expropriation or violence is particularly ugly.  I was privileged enough to avoid Vietnam combat, and I was “safe” enough not to get HIV, which previously could have been the most dangerous threats I faced.  I was economically stable for my entire work career, which sometime after 9/11.  I did have some family cushion.

The basic reaction from most people is to “belong” to something bigger than the self.  I think all this relates to “the afterlife” and I won’t get into that further right here. In retirement, I’ve had to deal with constant reminders of how narrow my capacity for personal intimacy can be, even if it can be intense in the right circumstances.  Yes, now I have to throw the “psychological defenses” (Rosenfels) to maintain my personal independence and stop being dragged into the causes as others.  Solidarity alone seems rather alien to me, even if I can’t count on affording that kind of attitude forever.

Again, as to the “belonging” idea, throughout history, individuals have suffered because of the actions of their leadership.  In Biblical times, it was considered morally appropriate that all members of a tribe be punished together for “disobedience” (to “Jehovah”).  In modern times, it’s the “everybody gets detention for the sins of one in middle school” problem,

I want to reemphasize my intention so see all my own media initiatives through.  That includes getting a novel out in early 2018, trying to market a screenplay, getting some of my music (written over 50 years, some of it embedded in two big sonatas) performed.  The best chance to make some of this pay for itself would be to get some (perhaps conservative) news outlets interested in some of my blog content, especially in undercovered areas (power grid security, filial responsibility laws, downstream liability protections in online speech scenarios including copyright, defamation, and implicit content (which can include criminal misuse like trafficking).  The intention is to help solve problems in non-partisan manners away from the bundled demands common with “identity politics”.

I tend not to respond to demands for mass “solidarity” with so many other causes, and I usually am not willing to “pimp” someone else’s causes as my own.  But I realize I could be riding on partially unearned privilege, which can become dangerous.  Indeed, having inherited wealth subsumes a responsibility to address needs as they arise;  to ignore them would be tantamount to stealing. I tend to think that helping others is easier if you are in a relationship or have had kids (that became an issue when I was working as a substitute teacher).  I think there can be situations where one has to be prepared to accept others as dependents and “play family” (and this often happens in estate and inheritance situations anyway, although it did not specifically in my own situation). We saw this idea in films like “Raising Helen” and in the TV series “Summerland”.

I’ll mention that it looks like I’m selling the estate house and moving out in October. That would remove the hosting opportunities for now; but, after downsizing, it could make other volunteering much easier and even open up the possibility of volunteer travel (although I need to stay “connected” at all times when traveling as it is now).

I have to add that taking on dependents grates against complacency. It means more willingness to sell other people’s messages rather than on sticking to your own.  Our culture has developed a certain split personality: resistance to sales people or middlemen and to being contacted by cold calls (the robocall and cold call problem), yet an expectation of voluntary personal generosity and inclusivity online.

The sudden announcement of the intended termination of DACA is a good example of how instability affects those less fortunate. Although I really believe Congress will fix it in the required six months, today “dreamers” would have to deal with employers or schools who are uncertain as to what their legal status might be in less than a year.

(Posted: Tuesday, September 5, 2017, at 7 PM EDT)

Retirees could face rental qualification issues as they downsize

This blog is not the normal place where I discuss personal history details, but personal experience does jive with policy and business issues for me when it comes to retirement and growing older, just as it has with gay issues.

I did come out of my “career ending” (so to speak) IT layoff at the end of 2001 with ING (now Voya) in better shape than most, with very ample severance and retirement pension.  And I did land from a seven-plus year eldercare experience, with a lot of hired caregiver help in the last 18 months (over $100,000 worth) much better of that I might have.  For example, in 2013 the “estate” amounted to private insurance to cover my dental implants (no, Medicare doesn’t cover them).

You don’t get to drop out of the competitive world and yet stay in “public life” (to quote one of actor Anthony Hopkins’s more notorious characters) forever, as you know it is a mathematical certainty that you will have a last day, a last supper (so to speak), a last plane trip, a last film, a last blog post. At some point it is likely (though not certain) that “my” brain will have to deal with the idea that it is over.  It gives me more reason to ponder the afterlife (the “Focus” areas as much as the Hallow Heavens, as the Monroe Institute puts it), the nature of how “I-ness” (a “strange loop” of Hofstadter) embeds itself into some sort of permanent distributed consciousness.

One of the issues is downsizing.  I am in an “inherited” house, which technically belongs to a trust.  There can occur some situations where this could be risky (like recovering from a big natural disaster).  It could be easier for me to focus on my “journalism”, fiction and music if I was in a modern, secure building, like I was in Minneapolis (the Churchill) from 1997-2003.  I could be more credible with others.  Yes, I have “space”, but housing others involves time and risk and is hard to set up to do properly (this has come up with the asylum seeker issue, as I have written here before). There is a particular risk of holding real estate assets whose value could disappear in a major WMD terror attack.  Yes, we don’t like to talk about it.  Renting might be safe.  Of course, you can get into Stansberry (or Ron Paul) -like debates on how personal nest eggs can disappear quickly because of global currency manipulation – who knows where Donald Trump’s stumbles can lead? I do understand the appeal of the doomsday prepper position after all, but am not equipped to deal with it. I remain dedicated to solving problems and making civilization work and sustainable.  (Hey, I voted for Hillary.  I wanted Al Gore in 2000, and we might have avoided 9/11 and the War in Iraq.)

I’ve recently started looking at the issue of how retirees who have assets but less income than normally qualify for an apartment.  I covered this on a legacy blog post in late April after looking into this a little while in NYC.   I would much rather live in a secure building with the “general population” than in a 55+ community, which is probably more expensive but may be easier to qualify.  Some of these communities are located farther in the exurbs (or all over Florida) and it would be hard to reach normal urban cultural activities from them – but some have their own theaters, for example.  Many senior centers bring in artists to perform but they are likely to be less intellectually challenging and more conventionally “popular”.

I’ve seen many comments that many apartment developments, those run by large property companies, do not want to use savings for qualification.  I can understand the reluctance:  investments can lose value, or be spent.  It sounds as if it is possible to convert (by having your financial institution sell some assets and set it up) some savings to secured cash accounts, for a year’s rent, and this may work with some landlords.  You would want to keep your name on rent for future periods (beyond a normal security deposit) in case something catastrophic happens to the building. That may or may not be safer than having cash tied up in conventional condo or co-op ownership.

Sometimes builders buy tear-downs from seniors in houses and let them live rent-free for a while, during which period the senior needs to find an apartment.  A senior might need to do it this way to have the cash to set up such a rent deposit account. Furthermore, pension income or even social security income could go down in the future due to problems at a previous employer or due to a more hostile political climate.

I was also told, and this seems disconcerting for someone with little family left, that the senior should be prepared to provide references to the landlord.  This is difficult if he or she hasn’t worked steadily in years but has lived on assets.  It does suggest that, given longer life spans and fewer kids,  seniors should consider trying to work as along as possible — even if it means some objectionable consumerist and myopic personal hucksterism — rather than ride on assets and play the pundit game (as I did).   There was a hint to use volunteer organizations for references.  But imagine the coercion involved in such an idea.  That gives the bureaucracy of larger charities in a position to judge the characters and reputations of people who need references – and encourages some charities to put more pressure on retirees to support their narrowly focused agendas.  This is a very disturbing comment.

I won’t go too far further into this problem here today, but in the past I’ve gotten feedback that it is difficult to be effective in any volunteer organization without really “belonging” to the group.  I’ll go into this more in another post soon.  Again, rather disturbing, but it is part of the whole problem of maintaining social capital among people without their own families, as even some libertarian writers like Charles Murray have noted.

Typical 55+ discussion.

(Posted on Saturday, May 13, 2017 at 3 PM EDT)

Guest Post: “How to Avoid Becoming a Financial Burden on your Kids”

Americans are living longer than ever, which means retirement could last 20 to 30 years for some people – maybe even longer.

That’s great for those who remain in reasonably good health and retire with plenty of financial stability.

But lengthy life spans also increase the odds that many seniors will deplete their savings, face debilitating health problems and need to turn to their children for financial help or caregiving.

That’s a far cry from the kind of retirement they dreamt of over the years.

“I’ve done focus groups where one of the chief concerns that comes up is people don’t want to become a burden on their kids,” says Jeannette Bajalia, a retirement-income planner, president of Woman’s Worth® (www.womans-worth.com) and author of Retirement Done Right and Wi$e Up Women.

It’s really too late to do much, though, when you’re 80 and your life starts unraveling.

That’s why it’s important to plan ahead to get your finances and health in the best shape possible, she says. Among some of the points worth thinking about:

• Unanticipated health care costs. It’s estimated that the average married couple will need to pay up to $250,000 in out-of-pocket expenses for healthcare during their retirement, beyond what Medicare and most Medicare Supplements will pay. “We’re beginning to see a lot of cost shifting out of both Medicare programs and private health plans, which means more out-of-pocket healthcare costs,” Bajalia says. “It’s entirely possible that the savings you thought would allow you to travel or to at least pay all the bills could be gobbled up by medical expenses. As you plan for retirement, you should make it a priority to discuss this concern with your adviser so the two of you can look at what options you might have to try to keep that from happening.”

• Long-term care planning. When it comes to aging, consider the possibility you might have to receive home healthcare or live in a nursing home or an assisted-living facility. The costs of such care can be daunting. For example, studies have shown that home healthcare can cost $50,000 or more per year, and nursing home care can run as high as 90,000 per year. “You don’t want your kids to have to pay for that,” Bajalia says. There are ways to prepare, such as buying a long-term care insurance policy or checking with a financial professional to help you develop a strategy for protecting your assets from nursing-home claims, she says.

• Self-care. Not every financial professional may do this, but Bajalia says she believes it’s important to integrate health education and a lot of self-care into a retirement plan. Spending money on preventive health routines to take care of yourself now can help you avoid significant health problems that lead to even costlier expenses later on, she says.  Research is now telling us that longevity is over 70 percent lifestyle.

“I know it’s important to older people that they be able to remain independent as long as possible and not have to turn to their children to help,” Bajalia says. “They just need to remember that careful planning is the route to accomplishing that.”

And one of the planning tools would be to help fund long term care insurance for your aging parents to keep assets in their estates, she says, so long term care is not simply for yourself but for your aging parents.

About Jeannette Bajalia

Jeannette Bajalia, author of Retirement Done Right and Wi$e Up Women, is president and principal advisor of Petros Estate & Retirement Planning, where she has designed and implemented innovate estate-planning solutions for clients and their families. She also is founder and president of Woman’s Worth® , which specializes in the unique needs facing women as they plan for their retirement.

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(Posted: Monday, January 23, 2017 at 6:45 PM EST)

“Moral Hazard”: some of us ask others to pay for our risks

“Moral hazard”, as an economic concept, really has little to do with everyday notions of “moral compass” or “deservedness”.  Rather, it refers to a situation where one party (often an individual person) uses more of a particular resource than he/she/it normally would because another party will pay for part of the cost, without that paying party’s direct knowledge or consent.

At the outset, however, the term seems related to our ideas about personal morality in the context of wealth and/or income inequality, because people often benefit from the unseen sacrifices (unelected costs) born by others.  Politically, the issue does get mixed into Marxist-related ideas about “to each according to his needs”, but also “from each according to his ability” must somehow be compelled.  It gets to be anti-libertarian.

The most obvious area where moral hazard will come up is in health insurance.  Some people will use more health care resources than others because they are inclined to be sicker.  Over a lifetime, age is less of an issue because we will all eventually die and all face increased risk of illness as we get older, so a “morally” appropriate strategy to deal with this problem can be imagined (whether Medicare achieves this is another debate).

Employer-based health insurance, as became common after WWII, tended to use moral hazard because some people in a company used it more than others.  The same is true when you try to regulate the individual market, and especially when you try to compel purchase of insurance, as with the Affordable Care Act (or “Obamacare”).

As an economic principle, when someone with a pre-existing condition uses medical services covered by insurance (without any surcharges) then that person is leveraging moral hazard, whether or not the condition is strictly inherited (genetic), or whether it involves the person’s behavioral “choices”.  As a “moral” (in the other sense) matter, probably most Americans think that genetic pre-existing conditions (like Type 1 diabetes or many childhood cancers) should be covered by the public in some way.  I have suggested that any health care rewrite under a Trump presidency would envision setting un a reinsurance company (public and private) to pay the additional health care expenses attributable to pre-existing conditions, so this issue doesn’t affect ordinary peoples’ premiums (and help lead to the escalation reported in the news shortly before the 2016 presidential election, which may be a bigger reason for Hillary Clinton’s electoral college loss than “the Russians”, fake news, or Comey and email-gate).  But it most be noted that right now, that even with the premium increases, it seems that insurance companies are getting stiffed by the federal government on the pre-existing condition issue (story).

But it is likely that there would be political (and culture-based) disputes on how to cover illness or injury related to behaviors.  The list is long:  cigarette smoking, drug-use, obesity (to the extent that it is perceived as overeating), for openers.  The last two of these behaviors (at least) probably have genetic influences as well as personal choices (the “thrifty gene” in native peoples and obesity and Type II diabetes).  You could add sexual behaviors, such as the “chain-letter” problem in the male homosexual community and HIV.  That aspect is today Themuch less than it was in the 1980s and early 90s, but still, modern successful clinical management of HIV can with protease inhibitors can cost about $60000 a year, or maybe $3 million in the lifetime of a young adult male.  You can also add sporting behaviors that have general social approval, like playing football and concussion risks.

Then, there is gender.  In purely economic terms, gender is the ultimate pre-existing condition.  Women have childbirth expenses and men, literally do not.  Women live longer than men, and their eldercare is likely to cost more (although today custodial care in old age is not normally covered by Medicare but may be covered by long term care insurance, which women are more likely to “use” than men).  Within families, generally husband and wife regard pregnancy as a joint experience and cost.  But in a total insurance pool, childless people would contribute premiums to pay for “other people’s children” (“OPC”).

The next place where “moral hazard” comes into play is workplace benefits, especially the push for paid family leave.  I’ve noted before that it is more “egalitarian” to offer parental leave to both parents than only maternity leave (which is all Trump wants to offer).  Most tech companies offer parental.  It is even more “egalitarian” to include adoption leave, and eldercare leave for caring for parents.  All of this costs a lot (I like charging another insurance premium deduction and making it at least contributory, so workers have to understand what it going on – rather than making employers (or “shareholders”) foot the entire bill out of anti-capitalist sentiment).  A benefit that most workers would eventually use becomes less a “moral hazard” situation.  But part of the paid leave problem is that when someone is out, other workers often do their jobs (even being on call for production problems in the I.T. world) without any more pay, often incurring personal sacrifices and expenses themselves.  Obama has been trying to fix this with new rules about overtime pay for salaried workers, but Trump is likely to roll that back.  But in the worst situation, a single or childless person bears personally some of the cost for a married co-worker’s sexual passion (as in “the Song of Solomon”).

There are other examples of moral hazard, as in finance, with the “securitization” of so many financial instruments (like mortgages), leading to the hiding of downstream risks and unsustainabilities, contributing to the subprime mortgage meltdown and then the financial crisis in 2008.  The bailouts amounted to the processing of moral hazard.

Although not usually viewed in an economic sense, we can relate other issues, like past military conscription (and the deferment history) as “real” moral hazard.  Like it or not, one’s own life (and assets) become behind-the-back bargaining chips for politicians to play.  Likewise, calls for volunteer work often involve a spontaneity that resists examination of the serious risks one is called upon to take to benefit others, and this brings us around from traditional economics to social capital.

“Scruffy hospitality”: especially for having friends over to watch baseball

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On a humid Wednesday morning, July 29, 1959, about a month before I was to start my junior year in Washington-Lee High School in Arlington VA (with that American history class from the world’s greatest social studies teacher of all time, Simon Korczowski ) and compose my big D Minor piano sonata (on snow days 6 months later), I rode over with my father to the barber shop (still there) in Westover in Arlington VA.  This was the first morning back after we had ridden home from Kipton, Ohio on the Pennsylvania Turnpike (four tunnels then) and the Washington Post newspaper delivery hadn’t been restarted yet.  Right outside the barber shop, I saw a news stand with the morning Post, and a sports banner on top, “A’s Hop on Pascual, too, 6-1” (game )

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The Washington Senators, who had started out the baseball season decently, had just lost their tenth game in a row.  The Kansas City Athletics had won their ninth.  This had been a “late” game in the Midwest (and at the time, KCMO didn’t have DST), but somehow the Post edition at the barber shop was late enough to have all the scores.  Less than ten years later I would complete graduate school in that area.  Camilo Pascual had been the Nats one ace (comparable to Stephen Strasburg or Max Scherzer this year). The Senators would lose every game on a western trip (in those days, the West comprised Kansas City, Chicago, Detroit, and Cleveland), for the first time ever.  The streak would end at 18 at home a week later with a second game twi-night 9-0 shutout over the Cleveland Indians, tossed by Tex Clevenger.

How well I remember baseball then – us kids even had, at one time, run a “league” in our own backyards (previous post).  OK, the point of this sermon – I could “feel” I was part of something “bigger than myself.”  From my earliest beginnings of hating sports, I rooted for the doomed Senators, in a representing a Nation’s capital city polarized by racial divisions that nobody would talk about, a city seriously compromised by the lack of democracy (call it “home rule”.  From a self-interest viewpoint, rooting for losers like the Senators made no sense. (The Redskins didn’t do well then, either.)  The Senators would do much better in the 1960 season, then suddenly move to Minnesota (where I would live 1997-2003 – funny how what goes around returns).

I recall that I didn’t even understand how baseball worked until third grade – that balls are batted and caught or fielded.  The physics (watching batted balls ricochet off the Green Monster in Fenway Park in Boston) was tantalizing. My third grade teacher and reported about my demanding too much attention and not having any feeling of affinity for my team or “group”.  How often today in MLB do we hear about “team” wins when a key star player had been injured?

Let me jump to another scenario, a sermon a few weeks ago at Trinity Presbyterian Church in Arlington VA, by Judith Fulp-Eickstaedt, where she spoke of “scruffy hospitality”.  She’s referring just being prepared to welcome guests in your home at any time without the necessity for ritual cleaning to perfection for company. That follows on a sermon from Oct. 27, 2012 when she talked about “radical hospitality”  one day before Hurricane Sandy was due.  (We had been through the power outages from the June 29 derecho).  As it would happen, there was little damage or inconvenience from Sandy here – the brief period of sudden low barometric pressure (and brief high winds) actually cleared up some hip arthritis I was having – nature’s cure.   I’ve heard the hospitality thing before – once being asked if I would consider using my home for a partisan fundraiser – oh, where was this coming from?   Of course, the hospitality thing comes up with so many real disasters – wildfires in the west, floods in West Virginia and recently Ellicott City, MD, but we’ll come back to that.

As for incidental hospitality, most of the social gatherings I attend are in public venues, often bars and restaurants (or, depending on the group, church gyms ready for “Godly play”, or even major league sports stadiums).  Not many are in private homes any more.  They were a lot more common when I was growing up (and, yes, my mother cleaned for them – I remember those shrimp creole dinner parties on winter Saturday nights.)

But “scruffy hospitality” goes along with another idea, something like “Lotsa Helping Hands”.  Churches (synagogues, and mosques) typically set this community up among their own fellowships.  Here’s were “socialization” comes down.  “You” are a member of a group before you express yourself as an individual.  Your content has no meaning until others benefit from it.  Others need to matter to you in a way that’s up close and personal.

The “helping hands” mentality is at odds with an individualistic “mind your own business” culture, to be sure.  When someone like me “returns” to a mainstream church – no matter how liberally politically (and today more and more mainstream churches support ideas like marriage equality, whatever the fringes are trying to do with “religious freedom” and the “bathroom bills”).  It is very difficult for me to step into a world like this and feel very welcome, because, for one thing, I never had my own kids.  I would be difficult for me to accept the idea of a “free ride” at work for a “new mom” (paid maternity leave) without wondering if I were being compelled to “sacrifice” for someone else’s benefit that I would never use.

So here we get to the heart of socialization – you have to start by belonging somewhere.  That was the point of Martin Fowler’s book on the subject.  If you “belong” you will feel natural empathy and willingness to chip in, even (to quote Judith) “when it costs you something”.  There’s been a lot written about this the past few days – in reaction to the aggressive hyper individualism of Donald Trump.

For example, David Brooks invokes Sebastian Junger’s new booklet “Tribe” in his piece “The Great Affluence Fallacy”; and then there’s a dual between Robert Putnam and libertarian Charles Murray over communitarianism, as implied in this book review invoking “I v. We” on Vox of Putman’s “Our Kids: The American Dream in Crisis”.   Then an effective LTE (“Loners can’t be fixers” ) slams Kathleen Parker’s libertarian interpretation of conservatism  in the Washington Post , Parker curiously had invoked Russell Kirk’s “10 Conservative Principles”, rather moralistic and proto-communitarian, where Kirk writes (in point 9) that power is, in political terms, “the ability to do as one likes, regardless of the wills of one’s fellows”.

The place where most people develop socialization is supposed to be the “natural family”, to borrow a term from a 2009 “manifesto” by Carlson and Mero.  (Sounds like saying “Most people walk in the direction they’re heading” – Shane’s famous admonition to Danny in “Judas Kiss”.)   Particularly, older kids are likely to learn to take care of younger siblings.  (I remember a mother’s saying that to me when I was working a Census survey in 2011 – like this was an off-the-wall moral imperative.)  That means that older kids in a family may have more opportunity to learn the personal value of “family” in relation to personalized achievement goals.  That may be one reason why younger kids may be less conventional or more “liberal” or rebellious, and insistent on their own paths.  Younger sons may be more likely to be gay for biological reasons having to do with epigenetics, but they also may have less opportunity to learn the “value” of becoming a future father and provider.   This all gets blown out – in reviewing a silly mainstream Hollywood comedy film on July 28 I noted David Skinner’s old-fashioned take on a supposed duty of men to become providers and protectors. And without the “reward” of having a family of one’s own (which in my generation required procreative sexual intercourse in most cases) it’s hard to fit in to a community centered around caring for other generations.  Family is the first place you learn to “love” people in a closed space unconditionally, regardless of “ability” (to borrow from Marx); it’s the first community where you learn to have each other’s backs.  In practice, that’s a big reason to need “relationships”. If you really want to learn more about “family values”, study the “distributed consciousness” of the (non-human person) orca (story). Cetaceans know no geography (or “Global Pursuit”).

Of course, that’s changing – with acceptance of gay marriage and of same-sex couples as parents.  That doesn’t “help” me “fit in” all that much.  I have to run on the record I have, and on what was possible earlier in my life in setting myself up.

So, then, what about all the other “communities” I “joined” during my adult life.  The most important may have been the Ninth Street Center  in New York in the 1970s.  Various others included the Oak Lawn Counseling Center in Dallas and then Whitman Walker in Washington, to volunteer for PWA’s, and social groups like Chrysalis and Adventuring, and there are others.  And of course there are political groups.  But in a couple of cases there have been incidents where I believe I did an “OK thing” and someone else thought something I did was wrong because I somehow didn’t “belong” enough to the group to know what was really going on behind the lines.

That leads to another place – whether knowledge should really be acquired in the “It’s Free” mode – the debate about open access, and even kicked off by Reid Ewing’s little short film about a public library.  A lot of people think that knowledge should come down through a family or social structure.  The Rosicrucian Order teaches that mystical knowledge is acquired as one moves through various levels of initiation (but then, so does Scientology).  Then, there is the “no spectators” mentality so well acted in the recent sci-fi film “Rebirth” (indeed, no “alien anthropologists” like me or Mark Zuckerberg).

There is a practical reality that today many people may not have total freedom to join other communities (for “socialization”) beyond their original family.  Of course, that’s the case in authoritarian societies, but even in democratic cultures, aging populations tend to keep people tethered.  The hard reality is that people need to take care of others outside of their own scope of choice sometimes, and find meaning in doing so.  We find this a hard thing to say.

Families do indeed have a problem letting go.  “Family” is supposed to be the place people learn to belong to a community, but some families never allow their members to move on beyond “taking care of their own”.  (See the David Brooks piece, July 15;  Murray had explained this in terms of social capital types, like “bridge capital” which grows out of “bonding capital”, but not always reliably.)

Many churches actually do reach out abroad, sending youth or college-age groups overseas, to Central America or sometimes even Africa, for missions or service — setting up a process where young adults learn to bond with others from cultures very different (and much less individualistic) than theirs.  The church mentioned above has a summer mission trip to Belize, and has even made a short film showing the bonding,  worthy of festival submission (like DC Shorts), in my view, at least.

As for me, I find it hard to stomach the idea of wearing somebody else’s uniform in public, or someone else’s protest flag.  Yes, earlier in my life, some of “identity politics” made sense (I marched in my first “Christopher Street Liberation Say” in New York City in 1973).  Individualism, and the narrow idea of personal responsibility (focused most of visible consequences for deliberate personal choices) has actually served me well in most of my adult life (for example, avoiding HIV). I’ve gotten away with viewing most people through the lens of “upward affiliation”, not from the meaning that would come from actually being needed in more down-to-earth ways by them.  But I’ve been lucky.  Yet, I do hold to the belief that no matter what happens to someone or what someone is born into, some of the responsibility for that person’s karma stays with that person, isn’t the automatic obligation of social policy.

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As for baseball:  Yes, Richard Harmon wants to pitch one game for his favorite San Francisco Giants, and thanks to Max Scherzer’s wife for helping set up Pride Night at Nationals Park.  One day, MLB will have a transgender pitcher; it’s sure to happen.

(Posted: Wednesday, August 10, 2016 at 2 PM EDT)