Tiffin wallah in Mumbai (food delivery)

Spending: Convenience or necessity?

Yes, in fact I do know it all. Until someone points out that, in fact, I have my head under my wing. This is about the blog post I didn’t write.

Recently, I saw individual Horizon Organic Milk packs advertised at Whole Foods.  I was about to write a scathing post about how the price was about 4 times the cost of a gallon of organic milk, how you could afford to let some of that gallon go sour and still be money ahead, and how you could just buy your kid a thermos—reusable and better for the planet than a ton of packaging.

Besides, if it’s popular or pitched to millennials or moms, it’s a ripe target to make fun of. We like to cast them as lazy over-spenders who complain about inadequate wages, right? But heaven forbid we should actually give credit for creating or buying into good ideas.

A recent Facebook post by Stephanie Tait on September 5th screwed my head on a bit straighter. Please search for this, and be sure to read the comments.  (Sorry, Stephanie, but I can’t figure out how to link directly.) Correction: here’s the link. Don’t miss it!  I’m just going to cite a few of the issues and products mentioned.

Waterproof case for cell phone

Ms. Tait kicks off with this—oh yeah, millennials are so hitched to their phones they can’t take a shower without them. Uh-uh.

Ms. Tait points out that for many disabled people, the phone is the lifeline and only way to call for help if needed. Without that, showering is far too dangerous unless someone else is actually in the house. This introduces a host of corollary issues: someone else’s schedule, whether you’ve gotten sufficient sleep to conform to that schedule, your state of health or exhaustion on any given day, and on and on. Makes a waterproof case seem like a simple solution, well worth the money.

Rent-a-closet services

You’re an arrogant spendthrift if you subscribe to these services. At anywhere from $100-$160/month, you can outfit yourself in designer duds that you don’t need, while returning them when you tire of them or they need maintenance. For $1,200-$1,920/year, you could buy quite a few wearable pieces, particularly if you keep things for several years. (I’ve been wearing one black dress for 9 years, but hey, that’s me.) You’re a lazy, status obsessed victim, right? Uh-uh.

Let’s say you’re someone with a need for professional appearance and low vision, or disabled in such a way that selecting or shopping is a major effort. (I always think shopping is a major effort, but again, that’s me. Dear daughter has always been disappointed in this.) Subscribe to a wardrobe service and you won’t need to shop, outfits will be coordinated and appropriate, and you’ll have an amount-certain budget item.

Pre-assembled meal kits and delivery

I’ve really laughed at these: frozen foods where you provide the slave labor and pay twice as much for someone to chop things for you, introduce lots more microbes, and get tiny amounts. Why not just cook on Sundays and put stuff in the freezer? Can people really be such inept morons that they can’t broil a piece of meat, steam some vegetables, and make a pot of rice? Uh-uh.

When my mom got too sick to cook, my dad was at a complete loss. In more than 50 years of marriage, he had never cooked a meal, and was extremely proud if he toasted the bread for a sandwich. We tried meals on wheels (at that time, about the quality of a student lunch), and Seattle Sutton (once Mom spotted that carton of yogurt, it was all over). Dad couldn’t manage grocery shopping, so I did it, and I brought over tons of frozen meals. But not everyone has a daughter who lives 5 miles away and can drop everything. Also, Mom felt incredibly guilty for getting old and sick, and they both felt an extreme loss of independence—they were stuck with what I cooked, and were too embarrassed to ask for anything different.

I think Dad could have managed cooking a meal kit. It would have saved shopping, given them interesting things to eat, and Mom could have given useful input even if she wasn’t the one standing at the stove. There are a lot of steps and mandatory excursions involved in cooking for yourself, and meal kits eliminate a lot of them.

Restaurant delivery services

You’re working hard just so you can pay for expensive restaurant meals whose expense means you have to work even harder. And you’re lazy and entitled and can’t be bothered to learn to cook or plan ahead, right? Or even manage to cook a meal kit? Uh-uh.

For many people, getting out at night is challenging and dangerous. There’s the difficulty of transportation, seeing at night, danger for vulnerable or frail people, getting dressed up—it’s a lot when you’d just like some pad thai. Curiously, no one thinks twice about having pizza delivered, but when the meal might actually be pricey, stay-at-homes aren’t entitled to that. When my daughter was sick in her dorm room on a fairly isolated campus, the value of this for any home-bound person hit me square between the eyes. If you don’t have help on-site, or are tired of asking your friends, or would just like something special, accessing a service such as this can contribute more than its cost in both pleasure and utility.

 

Good design for disabled people, or the elderly, whether of space or services usually turns out to be good design for everyone. Who doesn’t like the handicapped stall better?! I, for one, am going to try being slower to judge and put more effort into understanding. If something allows more people to have a better quality of life, and participate more fully in society, it’s well worth the cost.

Health care stethescope

That other retirement account: Financial planning for HSAs

Health Savings Accounts (HSAs) may be the best deal out there, if you can get it. All of us like to beat the tax man, right? HSAs are what’s known as triple tax free: you get a deduction when you put money into the account, the account grows tax free, and as long as you make withdrawals for allowable health care expenses (pretty easy to do), you don’t pay any tax on that either. They’re like a traditional IRA or 401k going in, and a Roth coming out.
But like many good things, there are a few problems and things to watch out for:
1) I’ve probably repeated this for the millionth time now, but you don’t have to pay yourself back for the medical expenses in the year you spent the money. You can accumulate the receipts (and carefully file them so you can find them) and withdraw them in any year, as in when you actually retire. You’ll have to be able to pay your deductible and out of pocket costs out of pocket, but if these are fairly low, you can keep the HSA invested.
2) As with every financial account, watch the fees. Some accounts ding you heavily if you don’t keep a minimum balance. Some charge you a monthly fee. Some employers will pay fees while you’re employed with them, but if you leave they stop paying the fees and the account starts getting bites out of it. If this is the case, you can rollover your HSA into a servicer with different (hopefully, better) rules.
3) It doesn’t do you any good to park it in a savings account paying half a percent. In this case, woohoo it’s growing tax free. But the growth is infinitesimal. You want an HSA that allows you to transfer the bulk to a brokerage, or at least invest in mutual funds. Even if you still work for the same employer as when you deposited the funds, you can rollover the account (or most of it) to a provider of your own choosing. Be sure you carefully check fees and options at your current account, and at the one you are thinking of opening.
4) If you are working with an investment advisor, you may want to consider whether the HSA should be invested as part of your overall portfolio strategy. If it’s going to be untapped for years, it should be managed to build wealth.

Once you’re retired, it’s probably a good idea not to hoard that HSA. If you leave it to your spouse, it becomes their HSA. But for any other heir, it’s a lump sum distribution that they will have to pay taxes on.

So, how do you use it up? Well, of course you can submit those hoarded medical expenses you’ve saved. You can also use it to pay premiums for long term care insurance, premiums for Medicare Part B and Part D (drug), vision and dental care not covered by Medicare supplement insurance, and any copays and deductibles. You cannot use it to pay supplemental or Medigap premiums.

Since these accounts do not usually grow extremely large, it seems to me that it would be pretty easy to use it up during a normal retirement. It’s a nice way to build up a war chest for unexpected medical expenses that crash retirement budgets. Too bad I can’t use it for veterinary bills.

If the employment picture is so great, why are people unhappy?

Don’t believe everything the President tells you. In fact, it’s a generally accepted principle that for anything he says, the opposite is true. Which is really chilling when he announces that we have the best employment and economic picture, well, since forever.
That’s not the felt experience of nearly every client (or family member, or friend) that I see. Although most people I see do have a job, I see certain factors that paint a far less rosy picture:

• Even if you have a job, you’re scared that it may evaporate. Corporate and institutional loyalty to employees is long gone. People definitely get fired at will, or on a whim.• If you’re young, you’re expendable. They can definitely find someone with your (limited) skills.
• If you’re old, you’re also expendable. They can definitely find someone younger for far less, and who cares about your experience. Your skills are probably out of date anyway.
• Ha-ha on worker protections. Do you really think this administration is going to go full throttle on discrimination claims, disability accommodations, or workers’ rights?
• You probably don’t have a union to protect you. Somehow employees were convinced that unions weren’t for “professionals” and that union dues would send them into poverty. Being on your own with no backup is certainly worth it, right? To the employer, that is.
• If you just graduated, you may feel hopeless about finding a job at all, and therefore aren’t counted as in the labor market. Congratulations if that $120K-$250K you just spent got you any services at all from your school’s Career Services office.
• The gig economy has infected even so-called full time, in demand jobs. Staffing companies have appeared like cucarachas in the so-called in-demand fields like health care and computer services. They may offer you a tiny bit better hourly rate (and it’s always hourly, not a salary), but your benefits are non-existent, they probably aren’t going to contribute to any retirement plan, your paid days off may not exist, and you’re very likely to be held to unreasonably high “productivity” standards. You’re working for Uber, whether you know it or not. So yeah, I guess you’re in demand.
• We have a miniscule social safety net nowadays. Social Security is unlikely to be anywhere near enough to cover expenses. You’re a unicorn if you still have a pension, and even if it exists you’ll have to work longer to qualify than indentured servants in the colonies did.
• Good quality childcare is so expensive that it’s not even worth it to work in some professions (you know, the helping, socially useful ones).
• Make me laugh, let’s discuss health insurance. If you leave your job, once it runs out you’re back on the exchange. And if you take a new one with group insurance, unless the employer has the same insurer, you’re probably going to have to meet a second deductible. If you do find yourself in this situation, be sure to discuss this with the new insurer—some will give you credit for having met your deductible. Despite how it looked when the Affordable Care Act went into effect, most of us are afraid to leave our jobs because of the cost of insurance. Oh well, at least we can get it now.

Except for the childcare (mom stayed home until I went to school) NOT A SINGLE ONE OF THESE POINTS was true for my parents (born in 1913 & 1915). Sure, there’s lots that was wrong in previous eras (discrimination, worker safety), but full employment under Harry Truman (I just finished David McCullough’s biography) looked a lot different than what “full employment” means today. And not in a good way.