We senior citizens need to look at a very direct relationship that we might not always acknowledge.  That is the reality that a healthy national employment figure contributes to the financial well-being of everyone, including seniors.  What is the relationship?

First, when more people are working and prospering, there is less need for assistance for those out of work needing help.  That’s pretty direct, and not too difficult to understand.

Another not-too-difficult explanation is that when the unemployment rate is very low, more people are spending more money and that always  boosts the GNP and the economy as a whole.  This is all basic economics.

But there is another less obvious relationship.

Emotional and Spiritual Well-Being and Wealth

Unemployment takes a huge toll on the human being who is out of work.  Particularly so for those who lost their jobs due to the declining economy, and through no fault of their own.  One of the top 10 concerns of seniors is finances–that of their own as well as that of the country.  But loss of income isn’t the only kind of poverty we are talking about with the unemployed.

People who search for employment day after week after month begin to lose self-confidence and self-esteem. The result is a very large group of people in our country whose buckets are very empty, financially and emotionally and spiritually.  Poverty that comes from inadequate income is compounded seven-fold by emotional and spiritual poverty.

I don’t know about you, but when I see people with those empty buckets solely because they got caught in the economic downturn, my heart aches.  A lot of us take seriously that biblical admonition, I am my brother’s keeper. We seniors are the ones who actually have the time to do something about it.

There are a variety of services and programs available to address the poverty we’re talking about here.  They exist in every community.  They offer food, shelter, clothing and job-search options for the unemployed.  And those agencies are always looking for volunteers to help them, because it means more money is available to spend on helping the jobless rather than paying a salary.

So what does this have to do with senior citizen finance?  Wealth isn’t just money; it comes in many different shapes and forms. I submit to you that when your brother’s emotional and spiritual poverty is ameliorated because of your helping hand, your emotional and spiritual wealth grows; your bucket gets fuller.  And that is the kind of wealth you can’t buy.  It’s called Grace.

Options for Monthly Fixed Income Benefits

• They were all receiving Social Security benefits, and they depended on those funds for paying for basic and primary needs like food, shelter, medical bills, transportation and incidentals.
• A couple of them had pensions from defined benefit plans with companies for who they worked pre-retirement; the monthly pension amounts were the same each month, and there was an annual increase based on something they couldn’t identify.
• Several couples had purchased annuities, investing money in a plan that guarantees a certain monthly benefit for a prescribed period of time.  Amounts they received monthly varied a lot depending upon how much was invested originally.
• Another woman had a 401-K plan from which she was receiving monthly payments.  She had contributed to the plan during her career; her investments remain intact, although changed from what they were when she was working.  She said her financial adviser recommended she have a more conservative investment strategy now because she doesn’t have ‘replaceable income’ any longer.
• Several people had investments in insured bonds of all varieties, and receive sometimes monthly, sometimes quarterly, and sometimes bi-annually income from these investments.  Many of the bonds have a 20 or 30+ year life, so the income will be predictable for a long time to come.
• One couple have been experiencing severe financial distress since the economy tanked, and they applied for and received a reverse mortgage on their home.  They chose to take the funds on a monthly basis for life, although they said they had the option to take the money in a lump sum and invest it with an investment firm.  As long as they are alive, they can remain in their home.

The discussion provided a good overview of the options available for seniors who need fixed, monthly, predictable income.  Some of our readers might want to talk with their financial advisers about the options.

Let’s take a look at what a fixed income is.  We typically use the term to describe the financial condition of millions of senior citizens.  When refer to income as ‘fixed’, we are saying that the income for those persons is limited to the monthly amount received from defined benefit plans, most likely Social Security. Those benefits may rise a little from year to year, but the amounts do not change within a year’s period of time. ‘Fixed’ means stagnant, unchanging… it is income that is ‘fixed’ in place for a specific period of time.

Contrast that with what many of us experienced during our productive career years.  We often sought and realized pay raises or additions to income that come with extra work, a second job, part-time work and extra effort. Our incomes fluctuated; they often changed from one month to the next, and sometimes with extra effort, our income increased.  If we were fortunate enough to have investments, we realized investment income through interest earned and dividends paid.

With fluctuating income, we could budget for extras when the extra income was there. Many of us were able to splurge on something out of the circle of ‘necessity’ from time to time. If we lived within our means, we were comfortable and secure financially.

Retirement Brings Financial Crises for Many Seniors

Retirement for many seniors brings a fixed income with no room for extras; that income is typically Social Security. Millions of us budget for basic necessities and have nothing left over for extras.  Indeed, many do not even have enough income for basic necessities, making it necessary to choose whether to buy groceries or pay rent, buy medicine or pay the electric bill, turn on the heat or pay the doctor. Living with unconscionable choices is the reality of life for many elderly people in America.

Our Social Security benefits are the lifeline for those of us on fixed incomes. And we number over half of the 55 million retirees in this country.  Our numbers are mighty, and our message to politicians is clear:  Don’t mess with our lifeline.  We can’t afford to lose it.

Retirees and Baby Boomers that we hear from continue to struggle with finances. We senior citizens are not in the 1% of wealth Americans; we’re in the 99%.  We want assurances that our retirement money will outlive us, and that is hard to come by.  However, there is another notion being utilized in a lot of quarters these days that hold some promise that it just might work to keep our money working for us as long as we live.

Back in the 1970s when interest rates on short-term investments were in the clouds, a three-bucket plan for retirement investment was conceived.  SCJ could not find where it originated, but if and when we do, we will give appropriate credit.

In the three-bucket plan, retirees and pre-retirees divide their savings/investments into three categories that are specifically designed to produce income at different times in retirement.

• The first bucket is for bank CDs and liquid savings–savings that are considered the safest of all.  You can draw down this money to zero before you have to begin using your stocks and bonds.  This pot of money is for immediate income, up to ten years.
• The second is for bonds that are considered safe; it is intended to fund retirement for years 10 through 20.
• The third bucket is for growth.  You invest money in riskier assets like stocks, real estate and gold.  This money is intended to be used after you have been retired 20 years.

How Do I Get More Information about the Bucket Plan?

The first question you probably have is this:  Just how much money needs to go into each bucket?  That’s where your trusted financial planner enters the room.  If you want to consider this kind of plan, do your research first. You can find a description with examples in the December 2011/January 2012 issue of AARP The Magazine.  Be sure you understand how the system works, and how much money (percentages of your total available) needs to go into each bucket.

Then, as always, take your information, notes and questions to your trusted financial adviser and have a talk.  Listen to her/his counsel; evaluate the pros and cons; thoughtfully consider all the information, and then make your decision about whether or not the Finance Bucket Plan is right for you.

There are a variety of Internet websites that offer assistance to senior citizens looking to make their retirement dollars stretch as far as possible.  SCJ did a search this week for sites that offer coupons targeted to senior citizens.  Here’s what we found:

• A full products and services directory offered by AARP for offers and discounts related to health and welfare, discounts, travel and financial needs;
• ShopAtHome.com offering free online coupons, grocery coupons, cash back rewards, free samples, restaurant coupons and contests.  This site boasts it is unique from other sites because it gives cash back to shoppers for purchases made through the online shopping cart;
• free-stuff daily.com is a funky site that provides a daily email if you subscribe; the email contains all sorts of free stuff that is available online; clicking on the links in the email gets you to the pages you want to review for deals and coupons;
• TheFreeDeal.com has coupons and deals galore, in a one-stop-shopping venue.  As with other sites cited, the focus is on what is free.
• AbsolutelyFreebies.com not only offers coupons, but there is also information about contests and sweepstakes on this site.  You will find everything free here.

Use Your Search Engine

Seniors are encouraged to use your search engine to find coupons and deals and freebies online.  Just type in something like “free coupons” or “free deals and coupons” and you will likely find what SCJ discovered, that is over 600,000 links popped up within a few seconds.  So the deals are out there.  All you need to do is click on the links in the paragraph above, or do your own search if you are looking for a particular kind of discounted or free item.

The Internet is your friend!  Use your computer and learn about all the possibilities in cyberspace.

Cheyenne, Wyoming

Frontier culture, wild west images and Frontier Days, one of the largest rodeos lasting over 115 years.  That’s Cheyenne.  Median housing price: $141,400.  State tax: On pensions, no; on Social Security, no.  Sales tax: 6%.  Best deal in town: Admission to the Cheyenne Botanic Gardens, nine High Plains acres inside Lions Park, is free.

Columbus, Indiana

This is described as an “…under the radar…” community with big attractions for senior citizens. Median housing price: $124,200.  State tax: On pensions, yes; on Social Security, no.  Sales tax: 7%.  Best deal in town: Drink in the Hoosier bliss of an ice-cream soda ($2.99) at the counter of Zaharakos, which looks the same as when it opened in 1900 — and sounds it, too, thanks to a fully restored pipe organ.

Ithaca, New York

Ithaca has major attractions for senior citizens who enjoy intellectual pursuits.  Cornell University and Ithaca College are the reasons why. Median housing price: $146,100.  State tax: On pensions, partial; on Social Security, no.  Sales tax: 8%.  Best deal in town: Lunch at the Moosewood Restaurant, a hippie haven that launched the vegetarian movement; shop and watch street performers on Ithaca Commons

Harrisburg, Pennsylvania

AARP says it better than we can: “Harrisburg’s 50,000 shade trees, 4.5-mile-long Riverfront Park and 20-mile greenbelt around the city showcase its modern skyline, lovely old cathedrals, elegant Capitol complex and well-maintained historic districts.“  Median housing price: $144,200.  State tax: On pensions, partial; on Social Security, no.  Sales tax: 6%.  Best deal in town: There’s no admission for Wildwood Park, which includes a nature center that specializes in wetlands life.

Midland, Texas

Midland was established by the railroad as a mid-way point between Ft Worth and El Paso.  Median housing price: $96,600.  State tax: On pensions, no; on Social Security, no.  Sales tax: 8.25%.  (Sales tax is higher because there is no state income tax in Texas.  Best deal in town: $10 buys a balcony seat at Summer Mummers in the Yucca Theatre, a melodrama/comedy show that began in the 1940s. Alcohol is served, and attendees are encouraged to throw popcorn at the actors.

There you have it, Seniors!  The ten best cities to retire in the United States.  There are likely dozens more that have major attractions for seniors.  The Internet is a great place to research available options.

AARP recently announced its choices for the ten best cities to retire in the United States.  Their examination included over 350 cities.  They looked at financial data, including property and sales-tax rates, median housing prices, cost of living and tax rates on pensions and Social Security.   AARP also included recreation, climate, and arts and culture.

Here are the results with a description of each city:

Winchester, Virginia

Just 75 miles from Washington, DC, this community is known for a slower pace, less city noise and rich history. Median housing price: $151,500.  State tax: On pensions, partial; on Social Security, no.  Sales tax: 5%.  Best way to spend $10: Shenandoah Conservatory has exceptional music, theater, and dance programs (tickets range from $5 to $25).  Loudoun Street Pedestrian Mall in downtown Winchester is full of little antiques stores.  Proximity to Skyline Drive, a 105-mile scenic highway through awe-inspiring Shenandoah National Park.

Portland, Maine

Portland is described by a resident as “…diverse, fun and evolving…”  Median housing price: $202,800.  State tax: On pensions, yes; on Social Security, no.  Sales tax: 5%.  Best way to spend $10: Pack a picnic and hop the ferry to Peaks Island (the fare is just $7.70 round-trip).  Shakespeare in Deering Oaks Park; free.  A baker’s dozen raw oysters at J’s Oyster, overlooking the bay; $12.  Eating a lobster roll next to the oft-photographed Portland Head Light in nearby Cape Elizabeth.

Gainesville, Georgia

AARP says Gainesville has, “…the sleepy charm of a prosperous southern town, including brick sidewalks and a constantly humming square that attracts shoppers from throughout northern Georgia.”  Median housing price: $141,800.  State tax: On pensions, yes; on Social Security, no.  Sales tax: 7%.  Best way to spend $10: Grab a drink and small plates at Recess Southern Gastro Pub on the square, then check out events downtown, including free concerts.  The Gainesville Symphony Orchestra; tickets: $20 to $30.  Two outlet centers within a 30-minute drive.  Fast access to the Blue Ridge Mountains and their panoramic hiking trails, lush with rivers, waterfalls, and richly diverse ecosystems. Gainesville is near the Chattahoochee and Oconee National Forests, which comprise 843 miles of trails.

Wenatchee, Washington

A nature-laden spot with a river flowing through town and surrounded by mountains, Wenatchee is a desirable spot for senior retirement. Median housing price: $192,000.  State tax: On pensions, no; on Social Security, no.  Sales tax: 8%.  Best way to spend $10: Have a milkshake downtown at Owl Soda Fountain & Gifts, founded in 1926, then check out “Art on the Avenues,” a collection of more than 70 unique outdoor sculptures scattered throughout Wenatchee.  Fall in love with baseball all over again with the AppleSox, part of the West Coast League, a wooden-bat summer collegiate league.

Tulsa, Oklahoma

Tulsa is a small city with big city culture and entertainment.  Median housing price: $125,600.  State tax: On pensions, yes; on Social Security, no.  Sales tax: 5.5%.  Best way to spend $10: Admission to the Philbrook Museum of Art, an Italian Renaissance villa built in the 1920s, is just $7.50.  Although Tulsa offers plenty of big acts (Elton John and Paul McCartney have both played the BOK Center), it’s got smaller quirky pleasures, too. Try a Mexican dinner with local and organic ingredients at Eloté.

Check out the next five cities in this column next!

An AARP article in September, 2011, described a variety of ways senior citizens can save money.  Being thrifty in difficult economic times just makes sense.  Coupon shopping, eating at home rather than in restaurants, living on a budget designed for your income and necessary expenses, limiting credit card use to only what you can pay when the bill comes all lead to saving money for senior citizens.

There is another suggestion SCJ has that can make a huge dent in your annual bill for gasoline for your vehicle.  That is, change your driving habits so you intentionally use less gas.  When we purchased our Toyota Camry Hybrid almost six years ago, we soon discovered it had a built-in reward system.  When we achieved at least 35-40 mpg, the words “EXCELLENT” popped up on the LED readout screen.  The car told us when we had driven well enough to achieve good gas mileage.  We were hooked.

Tips to Increase Gas Mileage

For the past (almost) six years, we learned by trial and error how to keep the mileage up and get the Excellent on our auto report card.  Here’s what we learned:

• Slow turtle starts, as opposed to jackrabbit starts, saved us gas;
• Speeds of 55-65 on the highway saves gas;
• Watching ahead for stop lights and signs in the city, and coasting to a stop rather than braking, increases gas mileage;
• Taking the foot off the accelerator and coasting downhill uses almost no gas;
• The last mile home is relatively flat; when we slowed down to about 20 mph, the gasoline engine shut off and the electric system took over, taking us that last mile on electric power; even with a standard gasoline engine, slowing down that last mile every time you approach your home can save gas.

These simple changes in our driving habits cut our gasoline bill in half.  Of course, the hybrid contributed to that.  But when we recently used the auto of a family member, who reported that we would probably only get 15-16 mpg while driving it, we discovered we could get 25 mpg if we drove as if it were the hybrid.  So gasoline savings will likely result no matter the kind of power the vehicle has.  Just another good way we seniors can pinch some pennies.

Some seniors are lucky; they hit on just the right gift for each member of their family a few years ago, and have just repeated that every year for Christmas gift-giving.  Or they give gifts of money or gift cards to everyone, and it works for both the giver and receivers. Or you ask for a wish-list, and then make a choice about what to purchase from the various lists you get.

Others of us find ourselves in a quandary every holiday season.  We do a lot of searching and shopping to try to find just the right gift for our children and grandchildren. If you find yourself in this category, go to the Internet to find help for gift ideas.

Internet Help for Gift-Buying

Here are just a few SCJ found that might interest you:

• AARP has an article that offers a lot of gifts for under $50.  Take a look at it here
• C-Net has gifts of all kinds, at all prices.  Links are provided for Internet websites that offer secure ordering.
• FindGift.com is a free online service that helps you get creative about gift-buying.
• RedEnvelope.com is that snazzy site that offers gifts that can be personalized.  Again, you can make purchases here with secure ordering.
• Gifts.com is another one-stop shopping mall online.  All varieties and prices are available for easy Internet secure ordering.
• And if you want to know gifts to avoid, take a look at this MSN article.  From useless gadgets to trashy lingerie, this list of 15 items NOT to buy is a good one to read and remember.

If you hit on a good site that works for you, make a note of it for future reference.  Making holiday shopping as easy as possible is the goal, both for this Christmas and all the Christmases to come.

A recent article in the AARP Bulletin sparked some discussion about senior citizen downsizing and why we choose to do so.  The usual reasons were highlighted in our conversations:

• desire to live more simply
• health and other issues prevent taking care of larger home and ‘stuff’
• desire to travel without demands of home and property
• desire to be sure heirlooms and family treasures get to specific people
• financial constraints inhibit ability to cover expenses of larger home

It is this last reason that brings some interesting issues to light. Let’s call it ‘financial downsizing’.

Senior Financial Downsizing

First, we seniors would do well to think outside the box about downsizing.  It’s not just limited to where we choose to live.  We can evaluate our lifestyle and choose to do some downsizing there.

For example, as the AARP article suggests, do we really need that Costco or Sam’s Club membership?  Most of us don’t buy in bulk anymore, and if we shops sales, we can get better prices on household goods and groceries than offered at the huge-box stores.  So downsizing with these memberships may mean both foregoing the renewal next time and shopping coupons and sales.

Financial downsizing may include turning the thermostat down a couple of degrees in wintertime, and up a couple in summertime. Too cold, you say?  It’s amazing how warm your body is when you wrap a bulky scarf around your neck, or you put a warm stocking cap on your head.  Much of our body heat evaporates from our neck and head; adding a few layers there will keep you much warmer.  Adding or removing layers, depending upon the season, all over your body means you will downsize your heating and air conditioning expenses.

Downsize your eating out?  Well, maybe.  But again, there is another option.  SCJ checked discounts for seniors and elders online and came up with a variety of websites that have lists of discounts for various goods and services, including some international information.  We started with Ask.com and found an extensive list; a friend recently sent an email with a long list of discounts for seniors.  You can find this very comprehensive list for seniors on this page on our site, SeniorCitizenJournal.com.