Sounds fantastic, but the catch is that the interest is a tax deduction, not a tax credit.  So if you pay $10,000 in primary residence mortgage interest during the tax year, you don’t get $10,000 off of your tax bill.  You get $10,000 times your marginal tax rate, or at most a few thousand dollars.  It’s a bit like paying a dollar for a quarter.

On the chopping block.  Is it really a disaster?

Flexo over at Consumerism Commentary mentioned that the mortgage interest deduction was on the chopping block at the national level.  The deduction is definitely in the sights at different levels, from state offices to federal congressional supercommittees.

This could be a personal disaster for homeowners that are depending on the deduction to make ends meet, as it can amount to several hundred dollars or even over a thousand dollars per month (annualized).  For everyone else, it will spell the end of a nice kickback from Uncle Sam.  In the long run, though, the removal of this subsidy (just like the removal of any subsidy) will affect home prices for everyone.  Removal of the mortgage interest deduction makes homes marginally less affordable, which pulls the price down a bit across the board.  So, it’s pay higher prices with a deduction, or pay lower prices without a deduction (and have a lower mortgage payment).

The deduction is irrelevant

What is relevant, though, is that rates are extremely low, still.  As of this post, 15-year mortgage rates and 30-year fixed mortgage rates are 3% and 4%, respectively.  Fixed, as in your payment will still be the same at the end of the mortgage, but it will hurt far less than it does now.  They may go down further, but they can’t go down much further.  (I doubt banks will ever pay us to borrow money.)

So pay no worries to the federal tax deduction for mortgage interest.  Watch instead the rates themselves.  It’s a great time to borrow for the purchase of a house if everything else makes good financial sense.

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Whether those financial windfalls are spent or saved wisely, though, is an entirely different matter.  Fortunately, it’s not that difficult to put these windfalls to effective use.  Here are two simple but broad principles that will help you to take full advantage of your windfalls if, and when, they come.

1. If you know that you’re receiving a windfall, make sure that you have the windfall in hand before you spend it.

Not all windfalls are planned, but some, like bonuses and tax refunds, may announce themselves beforehand.  If you’re owed a refund by the IRS and/or your state revenue department, then you’ll know how much you’ll be getting back if you did your taxes correctly.  (We’re in line to get a five-digit refund this year, thanks to a homebuyers’ credit.)

Short of taking out an expensive refund anticipation loan — please don’t do that! — the refund can’t be spent until the check clears the bank, or until the ACH deposit hits your bank account.  I heard a story about someone who took the homebuyers’ credit last year, and bought some things that they needed in full anticipation that their tax refund would come in on time.  Well, the refund didn’t come in on time, and they were in a bit of financial trouble until it did, quite a bit later.  (I think there was a hiccup in the documentation.)

Things can happen that delay a windfall’s arrival, so try to avoid going into the hole.  Credit card interest and late fees will take some of the fun out of the windfall.

2. Plan for what you’d do with the windfall, regardless of whether you know it’s coming, or not.

Getting back to the homebuyers’ tax credit, we are expecting that to arrive within a few weeks, and we already know how we’ll use a big chunk of the return of our interest-free loan to Uncle Sam, otherwise known as our tax refund.  Just by going through the process of deciding how we’ll use the money, we’re more likely to spend and save it as we’ve planned.  An extra $10,000 in the bank account is downright hypnotizing without a plan in place.

This is a wise exercise to go through, even if there are no windfalls on the horizon.  Do you play the lottery?  If you do, then please decide now how you’ll spend your winnings, how you’ll give it away, and how you’ll protect the rest of it from all of the long-lost “friends” that crawl out of the woodwork with all sorts of sad financial problems when they hear of your good fortune.

Tyrone Curry, a high school coach in Washington state, did just that.  Ten years ago, he decided that if he ever won some money, he’d help the high school to put a track in.  Five years ago, he won over $3 million in the lottery.   A few weeks ago, he presented the school with a check for $40,000 to put in a new track.

Mr. Curry beat the odds twice:  first by winning the lottery, and second by having something to show for his winnings five years later.

So, in short:

1. Make sure the check has cleared.
2. Make sure to check that you’re clear on how to use it!

Happy windfalling!

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The main criteria are these:

1. You (and your spouse if married) previously owned and used the same main home as your main home for any 5-consecutive-year period during the 8-year period ending on the date you purchased your new main home.
2. You purchased your new main home located in the United States (a) after December 31, 2009, and before May 1, 2010, or (b) After April 30, 2010, and before October 1, 2010, and you entered into a binding contract before May 1, 2010, to purchase the home before July 1, 2010.
3. You aren’t disqualified from claiming the credit for a number of reasons outlined on page 2 of the instructions — mainly revolving around how much expensive the home is, how much you make, and whether you bought it from someone who has a business or family relationship with you.

This is all well and good for us, because we passed this test, and can claim the $6,500 credit.  However, darn it if we don’t actually have to prove and substantiate the claim that we meet the criteria.  I guess the government isn’t up for handing out $6,500 credits to anyone who “claims” to have been a “long-time homeowner” and a “new homebuyer,” wink-wink nudge-nudge.  Ah well.

Here are the requirements for substantiating the credit on your tax return — which has to be physically mailed in, by the way:

• Proof of purchase within the appropriate window. This amount to providing a copy of the properly-executed HUD-1 Settlement Statement.  This shows the date of purchase, the address, the purchase price, and a whole bunch of other stuff related to the various closing costs and the financing obtained.  The IRS instructions recommend signing the form even if there’s no place for a signature on it.
• Proof of previous long-time residency. These papers I had to hunt for a bit.  What needs to be demonstrated is residency for five consecutive years within the eight years prior to the purchase of the new home.  The forms that can be accepted as proof are one of the following: (a) Form 1098 from your lender(s), which are the forms that the lender sends to the IRS (and you) detailing how much mortgage interest you paid for the year; (b) property tax records, which you would have had you been the owner; (c) homeowner’s insurance records.

I could lay my hands on the 1098s the easiest of the three.  I’ll still need to verify signature requirements for the HUD-1 because mine doesn’t have the sellers’ signatures on it.

But, you know, for $6,500, it’s worth the effort.

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A mortgage is the largest loan that people are likely to take out in their lifetimes.  They’re also very expensive to acquire.  Most of the closing costs that are paid by the borrower are largely for the benefit of the lender.  The appraisal fee protects the lender’s judgment that the property is worth at least the amount of the contract price.  Title insurance purchased by the borrower protects the lender’s interest in the property should there be problems with title to the property.  Private mortgage insurance paid by the borrower protects the lender against default by the borrower — and allows the lender to lend more money for the privilege!

A ray of sunshine piercing the dark mortgage cloud

Most of it is very one-sided against the borrower.  But there is a small reprieve:  the federal mortgage interest tax deduction.  It’s a favorite deduction for homeowners, especially during the first years of a long, long mortgage when the interest part is far larger than the principal part of the payments.  For mortgages totaling $1 million or less (for married couples) on up to two homes (with some caveats) the interest paid on those debts can be itemized on Schedule A of Form 1040.  For a 30-year fixed mortgage on $1 million at 5%, this mortgage interest deduction would offset almost $50,000 in income during just the first year.  Even for a more modest $200,000 loan, it’s still almost a five-figure deduction.

But hidden inside lies some craziness …

“Elle” over at Couple Money revealed this craziness in her post on saving a ton of money on your mortgage:

As many of you know, my husband and I are working towards paying off our own mortgage early. I mentioned before that keeping a mortgage just for the interest deduction on your taxes is crazy. You’re just sending over more money to your lender to reduce your interest rate by a fraction.

Don’t get me wrong.  I dearly love my deduction.  It’s about the only thing good about having a mortgage.  But that’s all that it is: a deduction.  It’s not a one-to-one reduction in taxes.  It only results in a partial reimbursement.  It’s like paying a dollar for a quarter.

But the mortgage interest deduction sure is a big selling point, isn’t it?  Especially with people who either want to lend you money or sell you a house!  The mortgage interest deduction is the sizzle that comes with the decades-long bondage steak.

What’s more, even though the mortgage interest deduction has been around for almost 100 years, it’s not an inalienable right.  As the ink gets redder, the pressure to increase inflows will increase, and the mortgage interest deduction could be reduced, or eliminated.  The rules can change at any time, really, so it’s not wise to plan for it to be there forever.

In other words, take the mortgage interest deduction for the gift that it is, but don’t go crazy and take it for anything more than that.

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Below I’ve assembled links to every state that has an individual state tax, with instructions on how to file an extension.  Every state is unique, so be sure to check what your state needs you to do to file an extension, and follow the instructions carefully.  You may need to copy federal forms to send in with your state return.  You may need to provide a reason for the extension, and will not get the extension if you forget!  You may need to estimate your taxes due.  You may need to do the form online.  The due date may be slightly different than the federal deadline.

The requirements from state to state (and DC, haven’t forgotten you guys!) aren’t wildly different, though, and there are several common threads throughout:

• For many of the states, you’re covered just by filing for a federal extension on time. That’s Form 4868.  Be sure to check for your state’s specific instructions by following the link.
• Extra time to file does not mean extra time to pay. I didn’t see an exception to this anywhere.  You still owe your taxes at the regular deadline, and can request a refund for the overage when you file.
• You may get a small reprieve for paying just most of what you owe on time. For some states, if you pay most of what you owe by the deadline and meet the requirements for filing an extension, you won’t owe penalties, but you’ll still owe interest on the unpaid amount until you pay.  If you pass the extended deadline, they you’ll probably start accruing penalties again.
• If the state owes you money, they’re typically a lot more easy-going. Sometimes you don’t have to file anything to get an extension if you’re due a refund.

Anyway, here’s the table.  Please verify by going through to the links that pertain to you!

Some state-specific notes on extensions:

• Arkansas. If you file a federal extension and it’s accepted, you do not need to file an Arkansas extension separately.  The form is necessary only in the event that you want to get an extension for your Arkansas return, but not your federal return.
• Indiana. The state extension form only gives you an extra two months, but the federal extension form gives you until November 18th.
• Iowa. There is no form, and the state does not honor federal extension forms, but if at least 90% of the Iowa taxes are paid by the due date, there is an automatic extension to file.
• Kansas. A copy of the federal extension form must be submitted with your Kansas return for the extension to be valid.
• New Mexico. Usually extensions are granted for any reason up to 60 days after the normal deadline.  Beyond that the reasons need to be better, presumably.
• New York. Extension request must be done online.
• North Dakota. A reason needs to be given, but filing a federal extension automatically extends the North Dakota filing.
• Ohio. The federal extension must be filed in Ohio.  There is no Ohio-specific extension form.
• Oklahoma. For e-filers, you get an extra two days to file your taxes.  The e-deadline is April 20th.
• Oregon. As with Arkansas, the form is necessary only in the event that you want to get an extension for your Oregon return, but not your federal return.
• Pennsylvania. The extension time is up to six months.
• Utah. No form is necessary, but there are prepayment requirements to get the automatic extension.

In summary, states want your money now, but they’ll usually give you a little extra time to get your return together if you just ask for it.

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Once the transactions for our primary checking account were entered, and the balance was reconciled, it’s time to start entering the transactions for the other accounts.  If just biting the bullet and getting started in the first place was the ugliest frog on my plate, going through about thirty pages of credit card transactions for last year’s charges to our primary credit card has got to be the second-ugliest frog.

Our primary credit card’s transactions was a big chunk of work, for sure, but between the checking account and this credit card I can now paint some broad strokes about how we spent our money last year. We did use cash now and then, but our checks and our credit card accounted for the large majority — most –of our cash flow.  We got a clear picture of our big spending weaknesses, the most glaring of which was how much we ate out last year.

Note:  these are broad strokes.  I had a year-end summary of transactions in front of me, which I transferred into Quicken.  This year-end summary has dates, merchants, and amounts.  I didn’t track down then whether my purchases at Sheetz were gas, or food.  Our trips to Costco could have been groceries, electronics, books, gifts, or household items, but again I didn’t get the receipt out then to check.  Right now purchases from Costco are all “Groceries” even though I know they’re not.  Purchases at Sheetz were “Auto:Gas” if the amount was about $20 or more, and “Dining” if the amount was well under $10.  I could have gotten some of these categories wrong.  But for broad strokes, they’re approximately correct, which is all you can expect from broad strokes, anyway.

Will I stop at the broad strokes?  No.  I have boxes of receipts that I can match up with the credit card charges and the checks to add some shading and detail to the big swaths of financial color.  I’ll need to do this for any numbers that will go on our taxes, because the closest that the IRS gets to “broad strokes” is “rounding to the nearest dollar — but only for amounts that are entered on the tax form.”

So just as a recap, here’s what I did to get the broad strokes of our spending for the past year:

• I entered the transactions from the account where we had our biggest cash flow. This was one credit card.  It was convenient to have a year-end summary that had all of the transactions for the previous year, roughly categorized.  If we didn’t have that, we could fall back on our monthly statements.
• As I entered them, I tried to get the category of spending roughly correct. A trip to Costco can mean a purchase of a bunch of different kinds of things, but “Groceries” was close enough.  What we bought at Costco were mostly groceries, and that’s fine for a first cut.
• I left detailed category splitting for later. Just like I didn’t get distracted with entering all of the transactions from other accounts when I was getting started, I didn’t hunt for receipts at this point.  Doing that will come later when I can concentrate on it.
• This took a few nights, but doing a few pages each night was manageable. That’s one of the benefits of starting a little earlier than the first week of April: there’s time to do it right, at a pace that won’t bore an ulcer in your stomach.  I didn’t have to push myself so hard that I lost concentration and started making a lot of silly mistakes.
• After entering all of the transactions, I made sure the amounts were correct. I only found a half-dozen errors in about one thousand transactions.  I made use of the “cleared” checkbox in Quicken accounts to mark off the amounts I had checked.  I’ll use it again when I find the receipts for our transactions.

So now I have well over 90% of our financial transactions in Quicken, with rough allocations to categories.  The next steps are to fill in the transactions for the rest of the accounts, and then work on breaking down the transactions using what receipts we have.

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This series of posts, entitled “Organizing for Taxes and Beyond,” will follow through the process I use, warts and all, to gather my financial life into some semblance of organization so that I can track our family’s income and expenses so that we can make concrete, realistic goals.

The tool I’ll be using is Quicken Rental Property Manager.  (I have the 2010 version but the 2011 version is the current one.)  My goal with entering my financial data into Quicken is to enlist its help as much as I can for completing my 2010 taxes.  Since I became a landlord this past year, I’ll be needing to fill out more tax forms in more places, so any help I can get from the software will make things easier.

The rest of this post will step through how I constructed the accounts I needed in Quicken by entering my 2010 transactions from our primary checking account.  Sleeves are rolled up, so here we go!

1. Created a new Quicken file, and created the primary checking account with the starting balance as it was at the end of 2009. Faced with having to import everything from the past year into Quicken, I started with our primary checking account.  Transactions from this account touch a large majority of the rest of our accounts, so if I can manage to enter the transactions properly for that account, I’ve gone most of the way to setting up the rest of the accounts as well.
2. Started at the beginning of 2010, and began entering transactions from the checking account statements. Now it’s just a matter of getting to work: start at the beginning and move forward.  I enter as much about the transaction as I can from the account statements and the check registers.  For checks written against the account, as well as electronic fund transfers (EFTs), I tried to get the payee and the expense category correct (in addition to the amount, of course!)  If I didn’t know for sure, or if it was possible that the expense could fall into more than one category, I categorized the expense as “Not Sure” — yes, there is a category called “Not Sure” in Quicken! — or I noted this in the memo section of the transaction.  I’ll work on figuring out these missing pieces of information later from the receipts.
3. When I hit a transfer into, or out of, another account that I wanted to track, I created the account. The first month’s worth of checking account transactions took most of an evening to do, because one transaction could trigger the creation of several new accounts (in Quicken).  My first three transactions of 2010 were (a) a mortgage payment, (b) a Prosper.com transfer, and (c) an ING Direct transfer.  The first transaction triggered two accounts: an asset account for the house, and a loan account for the mortgage against the house.  The second transaction triggered creation of an account to hold Prosper.com loans.  (This account is now a “placeholder” account; I track transfer of money into and out of the account, but do not track the individual loans yet.)  The third obviously required creation of an ING Direct account.
4. I created accounts, but I didn’t enter any other transactions that didn’t involve the main checking account. To keep things simple and straightforward, I didn’t enter transactions that didn’t involve the main checking account.  This means that all of the accounts (except the main checking account) will have an incomplete set of transactions when I’m finished entering the transactions for the main checking account.  This is all right.  I’ll revisit all of the accounts to enter transactions.  It would take too much time to shift gears entering transactions for a bunch of different accounts.
5. I took the time to track the details of my paycheck. I could track only the net pay from my paychecks, but by tracking all of the taxes and deductions I can have Quicken do some heavier lifting with tax preparation as well as report creation for retirement accounts and flexible spending accounts.  Saving my paycheck as a “scheduled transaction” in Quicken made editing later paychecks fairly easy.
6. For credit card payments from the checking account, I created the credit card accounts, but held off entering purchase transactions for those accounts. Again, I didn’t want to get sidetracked, so I followed the reasoning as in Step 4.  I have credit card accounts that have large positive balances (I’ve made payments from the checking account, but haven’t entered any purchases!)  The purchases from my main credit card will be entered after I’ve done the transactions from the checking account.
7. After entering six months’ worth of transactions by hand, I downloaded the rest from my credit union’s website. Six months were all that was kept, but correcting the imported transactions and recategorizing them was pretty quick by comparison.  I rocketed through the last three months of the year.

Now, I have a fairly complete set of transactions for our primary checking account, and have created accounts for many other linked areas of our finances.  The next task will be to enter the transactions from our primary credit card.  It’s this account that will contain the large majority of our spending transactions, and it will be the topic of the next post in this series.

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Everyone knows that a 401K is set up almost exclusively as a retirement plan, and as such, it comes with some pretty hefty penalties for early withdrawal (which is to say, before the age of 59 1/2). However, this hasn’t stopped many people from taking funds from their 401K, and finding ways to avoid the astronomical costs of doing so. Whether you’ve lost your job, you’re facing a medical emergency, or you could simply use the extra dough, there may be a way to access your 401K early. But there are a few things you need to know about before you treat your retirement fund like an ATM:

1. Income tax. The first penalty you will be hit with is income tax. Remember, any monies you filter into your 401K enter the account pre-tax. So the moment you begin to withdraw, the money is subject to income tax, just like any other earnings. Not only will you have to pay the government their normal pound of flesh, if your withdrawals happen to bump you into the next tax bracket, you could be facing a lot more expenditure come April 15th.
2. The 10% tax. On top of any income tax you will be required to pay, there is a standing, across the board 10% penalty applied to any funds you pull from your account before the age of retirement. When you think about it, you may as well be flushing that 10% down the toilet. Honestly, even check-cashing services don’t charge that much!
3. Exemptions. Luckily, there are a number of exemptions that will allow you to withdraw money without the 10% penalty (although you absolutely cannot avoid the income tax). Death, permanent disability, loss of employment after age 55, excessive medical expenses, and court-ordered divorce settlements are just a few instances of ways that funds can be withdrawn early without penalty, so you may want to see if you qualify for any of these exclusions (although if you do, you are probably in a pretty sorry state).
4. Borrowing. Some plans also offer a lending option where the 401K is concerned (although this is an addition to the policy that must generally be adopted by the company you work for, and most companies don’t want to pay extra for this feature). If you are lucky enough to have this option, you can pull money early and pay it back like any other loan: with interest (usually based on the prime rate). Of course, most companies restrict the uses for this money to circumstances like paying for schooling, purchasing a home (or staving off foreclosure), and medical expenses, just to name a few.
5. SEPP. A substantially equal periodic payment plan is another way to withdraw funds early, but it, too, comes with some unfortunate side effects. It works like this: you set up an account that pays you a certain amount annually from your 401K as a way to supplement your income, and you don’t have to pay any penalties to do so. Sounds pretty good, right? It is, except for the fine print. Once you set up a SEPP, you can no longer contribute to your 401K, thereby depleting your retirement fund. Plus, you have to continue to withdraw either for five years or until you reach retirement age, whichever is longer.

While you may be tempted to dip into your retirement account early, you are almost guaranteed to take a financial hit if you choose to do so, whether you pay penalties or you simply lose out on the interest that the money could have been earning if you’d left it alone. There are certainly ways to buck the system, but in the long run, you are essentially only hurting yourself when you opt to use your future funds today.

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Maybe that was just my home town, or maybe it was because it was 25 years ago.  In any case, in some places today, fire service is not only not guaranteed, sometimes fire calls are flat-out refused.

Such was the case for Gene Cranick, whose home caught fire September 29th, 2010.  He hadn’t paid his $75 rural fire subscription, so the fire department did not respond, even after he offered to pay whatever was needed.  His home burned to the ground, and his family lost everything.

A follow-on press conference from fire chief Bob Reavis emphasized the shortcomings of the rural fire subscription model when compared to a tax-based service, but also stated that the subscription model was the one they had to use with the rural areas in Tennessee’s Obion County that did not have their own fire departments.

One house in our subdivision had a fire a couple of weeks ago.  It burned to the ground.  In the days that followed, one of our other neighbors, who was a firefighter himself, told me parts of a conversation he had with one of the fire chiefs that responded to the fire.  Both of them agreed that there were shortcomings even in our fire protection system (which is paid for by our taxes county-wide, unlike that in Obion County) and that there would be discussions soon about what could be done to improve.

Regardless of the method by which the money comes in, residents get what they pay for. Sometimes fire protection is tax-based and everyone is covered.  Other times fire protection is subscription-based because of budgetary constraints imposed on municipalities by those who influence the budgets.  I predict that more and more will go subscription-based as municipal debt starts to weigh on budgets and the economy takes its toll.  When that one-in-a-thousand chance of getting a house fire hits you, you’re either covered or you’re not, and there probably isn’t time to get covered if you aren’t.  The subscription model in Obion County was a “pay before you need it” model, also called a “pay to spray” model.

Here are a couple of tips:

• Don’t assume you will have fire department support.  Verify it. If you’ve moved recently — or even if you haven’t! — please check to see what model your local fire department follows.  It may not be the same as you remember.
• Get a refresher on fire safety. Hopefully you won’t be as lazy as we were and wait until a neighbor gets hit before you plan an escape route from your house, get fire ladders, etc.  Check out FireSafety.gov for more information.
• If your fire department is volunteer, donate. The more that dwindling budgets are shored up with donations, the better the service will be for everyone.
• If your fire department runs on the subscription model, pay it. It’s now clear that some municipalities are defending the model, and you don’t want to be forced to go all-in on a two-three offsuit, if you know what I mean.
• If your fire department runs on the subscription model, do everything you can to make sure that you’re paid up at all times. Apparently Mr. Cranick forgot.  I know myself well enough to know that I could forget, too.  Do everything humanly possible not to forget.
• Petition the budget committee? I always feel a little dirty about swaying the vote, since I’m a laissez-faire kind of guy, but getting involved while fire protection is a hot topic (ahem) might be called for.

Any other tips I may have missed?

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Now, to be fair, the $12 million figure comes from assumptions are out of reach for most people:

• In retirement for sixty-five years, starting at age 35 — plenty of time to perfect that shuffleboard technique, I suppose!
• Living in Manhattan, one of the priciest locales in the universe.
• Spending $400 per day outside of housing — now New York City is expensive, but that’s still living fairly large.

David Ning argues, reasonably, that this is a ridiculous lifestyle that few people would actually want to live:

• Why NYC until you’re 100?
• Why are you still renting your apartment?
• Why are you spending so much?
• Why are you retired for so freakin’ long?

These are perfectly reasonable, well-thought-out arguments for why most people don’t need that much money to retire comfortably, especially for people who are already near the classic retirement age.  Under these arguments, though, is a huge assumption.  That assumption is that retirement expenses will remain about the same as they are now.  I think that’s a very poor assumption.

By the time I reach retirement age, my income will be relatively lower than for current retirees, and my expenses will be far higher than for current retirees.  $12 million may not be enough to have a comfortable retirement.  Here’s why:

• Social Security income will be far less, if it’s there at all. The system is in trouble.  The system is now paying out more than it’s taking in.  The imbalance will get worse:  baby boomers are retiring.  How to solve this imbalance?  Lots of ways that aren’t surprising:  raise Social Security taxes; remove the tax cap on earned income; reduce benefits; increase the retirement age for full benefits; institute a means test.  It’s the last one that would hurt people who saved.  Their contributions would go to the people who didn’t.
• Taxes will be higher. The US Federal debt is now past $13 trillion. It passed $12 trillion this past November.  The debt is blowing through milestones like you-know-what through a goose.  Deficits do matter, eventually, and eventually is just around the corner.  If the debt is owed to ourselves, we’ll be forced to pay ourselves back.  Right now we owe over $120,000 per taxpayer.  When this number climbs, when the interest payment on the debt exceeds the GNP, who will foot the bill?  Why, the rich people, of course!  The people who have the most saved up will pay up for themselves, and the people who didn’t.
• Good medical care will be very expensive. Universal health care or not, good health care will be harder to come by, and it will be more expensive if you don’t want to spend your retirement years waiting in line.  This requires money, and finding a doctor who has distanced herself from the Medicare system.  What they lose out on volume, they’ll have to make up on price.

It could be that we all can get by with less than we thought we’d need.  But why count on that?  Why aim for only $2 million?  Why not aim higher?

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