Military Financial Independence

Forensic Geriatric Finances

Posted on June 25, 2012 by Doug Nordman

Today’s post revisits the subject of caring for the financial independence of your loved ones. There’s nothing here about military retirement, but I’m very glad that our aggressive savings and low-cost lifestyle have enabled us to retire from military service without a bridge career. As all too many of us Baby Boomers are finding out, eldercare can be its own full-time job.

It’s been 16 months since my Dad has moved into his care facility. His Alzheimer’s symptoms reached mid-stage and he could no longer live independently. My brother (the guardian) and I (conservator) have spent most of that time pursuing guardian & conservator appointments, shutting down Dad’s apartment, figuring out his finances, and getting caught up on old business. (See the other links at the bottom of this post.) In the middle of that we shifted our focus to dealing with multiple myeloma and chemotherapy. It looks like things are finally settling down. Dad’s happy, the oncologist is in “wait and see” mode, and I have Dad’s finances almost where they should be.

So last month I started going through a three-foot stack of his files. 16 months ago (while Dad was in the hospital) I’d given his file drawers (a ten-foot stack) a quick once-over and pulled out the most important ones. I threw out about five feet of 20th-century stock analysis and spreadsheets. I boxed up the rest of the files for “later”, and now I’m going through them page by page. Luckily half of the box turned out to be all of Dad’s tax returns dating back to 1953– including supporting documentation. Most of those folders hadn’t been touched in decades.

These “less important” history files turned out to be more important than I thought. They had fascinating names like “Old Medicare receipts”, but they also had mis-filed papers. It never occurred to me that my father would make mistakes with his incredibly neat filing system.

Dad’s an electrical engineer, and he handled Alzheimer’s for nearly three years of independence with rigorous calendars & checklists. Even though these days he wakes up disoriented every morning, his wall calendar catches his eye and he reads his note to himself about where he is and what’s happening that day. It’s sort of a short-term memory re-boot… every morning. So I thought he’d been filing his papers in the right places, but that must have stopped soon after the Alzheimer’s got started. I guess that’s another one of my conservator’s blind spots.

One of the papers is a note on an osteopath’s stationery dated June 2009. Dad was probably referred by his primary doctor during his treatment for high blood pressure. The osteopath’s note covered all sorts of dementia causes and advised various things to do (or avoid). The doctor said that dementia is particularly difficult to diagnose in high-functioning people (that’s my Dad), and the doc wanted to do followup tests. Dad made his own notes on the osteopath’s diagnosis, and then added a memo to make another appointment in September 2009. But it was filed in the wrong folder, and I bet Dad either forgot about it or decided that he was tired of being a “lab rat”. We know that a couple of months later Dad wrote us letters that he could no longer use his computer, and that news started our countdown timer on his independent living. If he’d filed the osteopath’s note in the right place then he might have started treatment with Aricept or Namenda. But he didn’t. We never knew about it.

Another mis-filed form in the Medicare folder is a blood test from April 2010. The lab noted that his white & red blood cell counts were low along with his platelets. The memo asked Dad to come in for more tests, but there’s no evidence that he ever did. I don’t know whether this test was showing signs of multiple myeloma way back in early 2010, over a year before Dad was diagnosed with it. But the tests might have reflected lab errors or malnutrition instead of myeloma. I forwarded the lab results to his oncologist.

Most disturbing of all was a mis-filed form from his Medicare supplemental insurance company… for life insurance.

Dad’s Medicare supplemental insurance (“Medigap”) policy comes from a branch of Bankers Life and Casualty in his old town. Dad’s “Old Medicare receipts” folder had a bunch of letters from various agents over the years, introducing themselves or turning Dad’s Medigap business over to a new agent. Then in March 2010, an agent sent Dad a “Life Insurance Buyer’s Guide” pamphlet with an application. I can’t tell whether Dad started the conversation or whether the agent contacted him first, but somebody (other than Dad) actually filled out his application for a $92K life insurance policy.

The application’s not accurate or complete, but it named us sons as beneficiaries. It was signed by Dad and witnessed by two agents. It has a policy number and it’s listed as “Single premium whole life insurance”. The application summary printout said it cost $67,636.94 to obtain $92,380 of coverage.

You might say that I became a bit agitated. By March 2010 Dad was showing clear signs of Alzheimer’s as witnessed by two doctors (and us two sons). However, even a year later he was still carrying on social conversations with lawyers who thought he was competent, and he actually passed two mini-mental state exams with flying colors. So I could believe that his social skills made him seem competent… especially to an insurance agent seeking a big commission.

But $67K?!? That’s not a premium, that’s fraud. I searched all over Dad’s records for large withdrawals or mutual fund sales to pay that fee, and I couldn’t find a thing.

So I wrote to the insurance agent, included my conservator’s appointment letter, and asked for more information about the policy.

The original agent was no longer at that branch, but a different agent wrote back with new one-page computer summary. It turns out that the premium was actually $6763.69. (So for a while I had no idea where the “$67,636.94” came from.) The coverage was still the same. The policy was paid up with that single premium, so I only learned about it by finding the application in his medical file. I never would have received any other bills or correspondence from Bankers Life.

It’s hard to prove that anybody took advantage of Dad. If anyone is getting ripped off, it’s the insurance company. Dad could’ve bluffed his way through the whole application, especially if they filled it out for him. Even if the insurance agents were taking advantage of Dad for a commission, I think it’d be impossible to make a legal case out of it. The last thing I’d want to do is hire another lawyer, and even if Dad did get cajoled into spending over $6700 then eventually his estate is going to collect $92K.

However, I still couldn’t find any record of that $6763.69 payment. My remaining worry was that the money to pay the premium might have come from a bank or a brokerage account that I hadn’t found yet. Or even worse, what if it came from a safe deposit box? Dad’s financial files had looked pretty accurate until I started going through them one page at a time. What if he’d started opening new accounts, forgotten about them, and mis-filed the paperwork– or never filed it at all?!?

So I shared my concerns with the agent and asked whether they had any record of how Dad had paid for the policy. The mystery payment cleared up pretty quickly once the mail got back to Hawaii: the new life insurance policy was bought from a 1035 exchange of old whole-life policies.

Over four decades ago, Dad purchased four separate whole-life policies on my brother and me. (The first I learned about this was in March 2011 when Dad was in the hospital. I found the policies in his “In case of death” files.) I don’t know much about life insurance– I’ve only ever had military term life insurance and I don’t carry any today. The 1960s company was “State Mutual Life Assurance”, which eventually morphed into “First Allmerica Financial”.

However, we know how that whole life insurance turned out. From Dad’s files, in the late 1970s the dividends began to fall short of the premiums and Dad let the difference accrue as loans against the cash value. In the ’80s the tax laws changed (the interest on the loans was no longer tax-deductible) so Dad paid in more money to keep the policies current. He had four thick files of correspondence with SMA/Allmerica asking every year for more money to pay the premiums, Dad grudgingly paying the extra, and both sides bickering over the cash value. It takes a lot to get my Dad upset, but judging from his letters this company succeeded more than once.

Over the years the four policies grew to a total cash value of about $65K and an insured value of just over $98K. By 2010 (when he did the 1035 exchange) I’d already achieved financial independence. My brother is close too, so I’m not sure how Dad felt about keeping these policies going. My opinion is that neither of us sons needed Dad’s life insurance, but Dad didn’t talk about it with us.

We still don’t know who started the conversation in 2010, and that insurance agent has moved on so we may never know. However, interest rates were still dropping and the old policies may have needed more paid-in premiums, so I bet Dad was pretty happy to do a 1035. The application listed their cash value at $67,636.94 (I recognized that number!), and the agent recorded a one-time premium of $6763.69. Their “net surrender value” was a little over $62K and the insured value is now $92K. Those numbers don’t make much math sense, but that’s what’s on the one-page database printout summary.

I don’t know why Dad kept the old policies in force for so long, but I’m sure some of his motive was “sunk costs“. By 2010, as his Alzheimer’s symptoms took hold, I can understand how he’d think a 1035 would solve all his problems. He probably felt that he didn’t need the cash, because by this point he wasn’t even spending his pension. Maybe he wanted my brother and me to have enough money to take care of death expenses. I wish he’d talked about it.

I mailed a query letter to First Allmerica, and they confirmed the 1035 exchange.

Dad’s old tax returns are also a valuable resource for hunting missing assets. I looked through 10 years of 1099s and confirmed that he’d only had one other checking account at another bank. He mentioned in an old letter that he’d closed it in early 2004, so I’m feeling pretty confident that we’ve found all his assets… and this time I really mean it.

His 2010 tax return also included four 1099-Rs from First Allmerica for the 1035 event. None of that was considered taxable.

All this from a sheet of paper in the wrong folder. At least we had a starting point.

I learned that insurance companies are required to turn over inactive policies to the state in which they were purchased. The National Association of Unclaimed Property Administrators runs a database that links to the state’s websites. I’ve gone through this search several times, along with the Treasury Hunt website for government bonds. We haven’t found anything yet.

The account search paid another unexpected dividend. It’s been 16 months since Dad used either of his credit cards, and both have expired. I have the new cards and I have not activated them, but the accounts are still active. I’ve never needed to do anything with them, so I’ve never looked at them before. When I went through their online account histories looking for a $6763.69 premium charge, I realized that one of the accounts is a Chase “rewards” card with 17,000+ points on it. I clicked on the “Redeem rewards” link and I was able to claim a $150 cash rebate plus a $10 gift certificate.

Another asset-management tip that needs to be added to the conservator’s manual. Somebody should write a book…

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Posted in Military Life & Family | 2 Comments

Book review: “All The Money In The World”

Posted on June 21, 2012 by Doug Nordman

Are you tired of grubbing for money?

The financial media is gloomier than ever about the prospects of saving enough for retirement. Every day we’re admonished that we’re not saving enough, that we’ll need millions of dollars, that we can’t retire until our 70s, and that we can’t even be sure whether any of today’s numbers will turn into tomorrow’s reality.

Americans are also rumored to be suffering from frugal fatigue. We’re expected to be alert to every little latte factor while using an overwhelming plethora of tools to track our spending, our budget, and our progress toward financial independence.

But when can we start being happy? Are we there yet?

Note that George has a smile on his face…

Laura Vanderkam claims that we have more than we think, and we just need to spend it more creatively. Instead of saving all our lives for happily ever after, we can find more ways to deliver little bursts of happiness now. It’ll actually make us feel more satisfied with our progress in saving for retirement, and it will help our lives feel less like deprivation.

Part of the psychology of our relationship with money is that it’s a status marker. We use money (or, more realistically, we borrow it) to show our level of wealth and to compare our progress to the rest of society. Of course the reality-show media has become very good at showing how celebrities are far ahead of all of us and we’ll never catch up. We’ll never have the big mansions or the luxury vehicles– we might not even have the fancy clothes or shoes. After a few years of trying to save for your “future”, you’re tired of being reminded that you’re the only one who seems to have given up your present lifestyle for a future fantasy.

However, it’s just as easy to compare our status to the rest of the world as it is to compare it to “celebrity world”. The global median household net worth is only about $2200, and $61K puts you in the top 10%. Yet in 2007 the American median household net worth was about $120K. Globally, we’re closer to the 1%.

If you’re a servicemember or a veteran, then you already understand that happiness status is relative. You many never spend your life in a mansion or drive a luxury vehicle, but you know exactly how you feel when you don’t get to sleep for two days. Or when you’re living in the field and digging your own toilet. Or when it’s your turn to take a submarine shower– next Tuesday. Or when there’s no fresh fruit for the rest of the month. When you come back to “civilization” then you feel pretty rich for a while, right? Even today, two decades after my last submarine deployment, I still remember an awesome rainfall showerhead in a hotel in Yokosuka, Japan, although the hotel is long gone. I still feel guilty about letting food go to waste. And, yes, I can make lettuce last for six weeks. My spouse says you don’t want to know.

Another psychological issue is the hedonic treadmill. We all tend to have a certain setpoint of happiness, and it’s not affected by money for very long. Interestingly, it also doesn’t take very much money to bump up our happiness level for a little while before it returns to its “normal” level. Research has shown that a thousand dollars won’t boost our happiness level much more or for much longer than a hundred dollars. However, the real advantage of a thousand dollars is that it can be used to deliver ten jolts of hundred-dollar of happiness as well as just one huge jolt.

I read a lot about personal finance and consumerism, yet Vanderkam brought up two examples that I’ve never considered before: weddings and yards.

Everybody “knows” that fiancées are entitled to a diamond engagement ring worth “about two months’ salary”. We’re supposed to spend the “right” amount on wedding rings, the wedding ceremony, the reception, and the honeymoon. We joke about the American version of a wedding dowry, but I didn’t know that the entire industry didn’t really ramp up these “traditions” until the 1930s. States had abolished their 19th-century “breach of promise” laws which enabled women to sue men who didn’t follow through on promises of marriage. When the promise of an engagement lost the force of law, women began to seek a more concrete demonstration of a man’s commitment– just as the diamond industry was struggling with a glut of overproduction. DeBeers persuaded Hollywood to show their stars wearing diamonds and acting out engagement scenes, both on film and in real life. Within one generation a diamond was considered a “traditional” part of an engagement, and the entire wedding industry jumped on the bandwagon. Today’s wedding-planning website TheKnot.com perpetuates the legend with statistics– and a huge online store for planning every detail, right down to personalized (yet perishable) Hershey’s Kisses.

But what about after the honeymoon is literally over? A wedding is one (very long) day but a marriage is a lifetime of challenges. If the average couple spent $5392 on an engagement ring that proved their worth to each other, how else could that “concrete commitment” help their hedonic treadmill? The money could buy over a hundred nights of babysitting alone. The $12K spent on the “average” reception could also pay for nearly five years of housecleaning (until toddlers are hopefully old enough to start cleaning up their own messes). The $2000 wedding flower bill could also buy two hundred $10 bouquets– a monthly flower surprise that could go for well over a decade of inflation-adjusted blooms.

Vanderkam isn’t suggesting that we stop spending money on weddings– only that we spend it more thoughtfully. Buy the engagement ring if it has meaning to you, but avoid the Olympian challenge of matching society’s “average” amount. Have a fun ceremony, but don’t turn it into a major logistics operation stressful day of drama and hysterics. Treat yourself to some time off together, but don’t feel obligated to “do the honeymoon” straight out of a bridal magazine. If you plan your wedding well, then you’ll deliver a great boost of enjoyment to your hedonic treadmill. However, if you also manage not to blow all your assets on that one event then you’ll be able to keep boosting your hedonic treadmill for years. Whether you spend $500 or $50K on the wedding, the boost will deliver about the same amount of happiness for about the same length of time. But if you only spend $500 on the wedding then you’ll be able to spend it on other things that will deliver the same boost– again and again and again.

You can imagine how Vanderkam feels about the American fixation with “as much house as you can afford”, including a green carpet of perfectly manicured grass. If you’re contemplating a weekend of yardwork, then read her “Laughing at the Joneses” chapter first.

She also debunks a popular myth of early retirement: “You can’t retire early if you have kids“. Instead she shows that the marginal cost of the third child can be nearly zero– unless you try to raise each kid as if they’re the only one. Admittedly “marginal cost” is a terrible reason to have children, but “cost” is also the wrong reason to stop having them. Most families make the right decision about the number of children they want (for the right reasons), and Vanderkam shows you how to make the finances work for your family values whether the number is two– or six.

So if you’re spending smaller amounts of money in favor of more frequent doses of happiness, can you retire yet? It depends on your budget. Vanderkam starts with a chapter titled “Don’t Scrimp More, Make More“. When I retired a decade ago, I kept a white-knuckle grip on the purse strings. I “knew” the statistics and the risks, and I was going to make sure that we didn’t overspend a nickel of our budget.

But I should have paid attention to our daughter’s approach. She was only 10 years old at the time, and the word “scrimp” was not in her vocabulary. If she wanted something then she saved up her money until she could afford it, and then she bought it. If she wanted something NOW then she went out and earned more money doing dirty jobs (at home and for the neighbors) until she could afford it. She’s carried that thinking into college, where she earns her “special treats” by giving $12/hour campus tours. She doesn’t have to walk backwards for a few hours just to afford a nice dinner with friends, but she enjoys bragging on her campus and meeting new people. The extra money is a pleasant bonus, and she sees these income opportunities everywhere she goes.

Vanderkam applies the same logic to her chapter on “Rethink Retirement“. She’s not one of the hardcore “Never retire, rewire!” crowd, but she points out that it’s simplistic to expect that your work week will go from decades of 50+ hours to decades of zero. Instead you’ll replace your office environment with self-directed entertainment, and some of those activities might earn you money as well as fulfillment. Or you might completely overhaul your lifestyle to spend your time doing things you enjoy instead of spending money to get things done.

It all sounds so deceptively simple, doesn’t it? In “The Military Guide“, it boils down to ignoring society’s standards and “aligning your spending with your values”. In Vanderkam’s book, it includes an eight-page handbook of exercises to jumpstart your thinking. You have the tools and the supplies– what you really need is the time for thoughtful contemplation and the creativity to find the solutions. “All The Money In The World” is a very pleasurable way to reflect on your own situation and recover your creativity.

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Lifestyles in early retirement: Hawaii long-term travel

Posted on June 14, 2012 by Doug Nordman

Last week’s post on long-term retirement travel talked about different air & lodging resources for seeing the world. I’ve also added several military websites to the sidebar “Travel links” section. Like blogger Jan suggested a couple of weeks ago, it’s a great area for showing advertising from military lodging & recreation centers. I’d much rather have those advertising dollars for military charities than from payday loan companies.

Waianae sunset over Pearl Harbor

But for today’s post, a reader has a different slant on military travel:

My wife and I would like to be able to spend a month or two a year in Hawaii as well, to get a dose of sunshine! We’ll see how it all works out. Any advice for a couple of military retirees on how to live frugally in Hawaii for a couple of months per year? Working or volunteering somewhere in return for cheap housing?

Great question, thanks! My advice comes from these basics: cheap airfare, traveling light, finding long-term lodging, and living like a local.

Flights

My first advice on travel to the islands would be Space A. Your flight might land on the reef runway next to Honolulu International Airport, but you’ll end up on Oahu’s Joint Base Pearl Harbor Hickam. It’s possible (but unlikely) that a Navy P-3 might make the flight from the Mainland to land at Marine Corps Base Hawaii near Kaneohe. (Unless you’re a Navy aviator with deep contacts in the maritime surveillance community, I wouldn’t count on this option.) Those are your only military choices for getting to Hawaii, and you’ll have to transfer to a commercial airline (or a boat!) to get to the neighbor islands.

If you’re staying in Hawaii for a few months, and if you’re flexible on your travel dates, then you may be able to take advantage of airline pricing. In general, Hawaii flights are more expensive in the summer months when kids are out of school. June and July are also particularly busy for honeymoon travel. However, the most expensive flights to Hawaii are during the winter. The colder it is on the Mainland, the more the airlines charge you to come here. Late November through mid-February is “high season” for travel and lodging, so you’ll find more bargains if you can get here in September-October and leave in March-April.

If you don’t have to arrive on a particular date, and if you’re traveling light (no checked luggage), then be open to the possibility of getting bumped. Flights from Los Angeles and San Francisco are particularly good candidates for this option. You may spend several extra hours (or even overnight) at the airport, but you may be able to negotiate hotel/food vouchers and discounts on your next trip.

Houses, condos, cabins, and camping

Last week’s post talked about military lodging, and the “Travel links” sidebar has over a dozen links to military lodging & vacation websites. If you’re planning to live here for longer, though, I’m going to recommend other options. The advantage of these short-term military lodging options is that you have a starting point for checking out neighborhoods and rental ads before you make a longer-term choice.

The cheapest Hawaii choices are house swapping and house sitting. Of course this is challenging if you’re traveling with four kids, but older singles (and couples) are generally regarded as good candidates. My spouse and I have never done a house-sitting gig or swapped houses, so I’m going to defer to Sydney Lagier’s considerable experience and Billy & Akaisha Kaderli’s network with links that I’ve read on their websites. The largest and most popular house sitting and swapping sites are House Carers, Trusted Housesitters, Caretaker Gazette, and Home Exchange. (Of course for Home Exchange you actually have to have a home that someone from Hawaii would like to visit, too.) You’ll want to do your due diligence on these sites to learn the rules and the challenges of getting a Hawaii home. I doubt that you’ll be sitting in Kahala or Waikiki, but you could certainly end up elsewhere on Oahu or in a more rural location on a neighbor island. Make sure you understand your transportation options, too– the homeowner might not mind you sleeping in “their” bed but they could draw the line at driving their car. Bus service is available on Oahu, especially in Honolulu and other major neighbor-island towns, but as you get further away from the urban areas you’re going to want to borrow or rent your transportation.

Hawaii has a large snowbird population, and many of them are condo owners trying to rent out their places during the rest of the year. If you’re able to work around the snowbird months, or if you can find a snowbird who’s not visiting Hawaii that year, then you’ll be able to get a discount rental. We’ve seen the best success with Vacation Rentals by Owner and AirBnB. A third option is the military Automated Housing Referral Network, although this is mostly seeking military tenants for long-term rental properties near military bases. (We’ve used AHRN several times to find tenants for our rental property.) AHRN landlords would probably prefer at least a six-month lease but some of them will go month-to-month for Reservists or temporary duty personnel. Craigslist might also work if you know the neighborhoods and are willing to deal with the occasional eccentric landlord or a scammer.

Another option is lodging at military recreation areas, state campsites, and national parks. (See a few paragraphs further down for working at a national park.) You’ll be in “rustic” cabins or tent camping, and the length of your stay may be limited by high demand or agency policies. You’ll also need to carefully consider your transportation needs– for example the nearest bus stop to the White Plains Beach cabins is over two miles from the beach. Pokai Bay beach cabins are in Waianae, over an hour away from Waikiki. Kilauea Military Camp (on the Big Island) is near the middle of the island and at altitude– winter temperatures can dip down into the 40s. It’s also an hour away from Kailua-Kona and Hilo. Oh, and there’s a live volcano erupting nearby… but it’s been well-behaved for nearly three decades. No worries!

I’m sorry to say that camping in Hawaii may not be a fantasy experience. Camping is viewed as a way to “live at the beach” for quality fishing and surfing and partying, and evening noise can be a problem. Gasoline generators and sound systems can be an issue, and camp security is not always immediately available. Some state campsites and beaches have a persistent homeless population. The best tent camping I’ve experienced has been at White Plains Beach, Bellows Air Force Station, and Haleakala National Park. Camping in Haleakala is for hard-core backpackers only– at altitude, with no transportation or open fires or potable water.

Transportation, entertainment, & food

Part of the location equation is also transportation. If you’re in Waikiki then The Bus (or, as it’s more popularly known, “Da Bus”) will take you just about anywhere you want to go. Elsewhere on Oahu the nearest military base will have a car rental franchise (no airport taxes/fees). Car rentals on neighbor islands can be expensive, and unfortunately there are no RentAWreck franchises in the islands. Your maximum flexibility for minimum price in the more remote neighborhoods might be bicycles, scooters, and short-term rentals.

Once you’re here, entertainment is relatively cheap (especially outdoors). You’re living in one of the world’s biggest outdoor recreation areas where you’re only limited by water, sunscreen, and protective clothing. Oahu has an extensive network of bicycle trails (particularly on the North Shore and around Pearl Harbor) and every island has miles of hiking and beaches. If you don’t know how to surf, then this is the place to learn. Every beach rental franchise has someone available for a lesson, and military recreation areas (like White Plains Beach) will offer very cheap lessons from the lifeguards. Kayaks and stand-up paddleboards are also easy to learn, with different muscle groups and different reflexes. If you’re hooked then there’s a lively Craigslist market in used gear, and almost every surfboard shop sells reconditioned used equipment.

Living in Hawaii long-term means eating local. If you’re expecting a daily breakfast of box cereal and cow’s milk, then you will pay dearly for the privilege (especially on neighbor islands). Lunchmeat can be surprisingly expensive, too. Of course you’ll be able to find a wide variety of fish (both fresh & frozen) as well as local beef, pork, & chicken. Vegetables are plentiful & cheap, too, if you eat the local versions of greens & fibers. You can find potatoes but you could substitute yams or, for a color thrill, Okinawan sweet potato. Poi & taro products are an acquired taste but they’re easy to find, and rice is cheap. If you’re expecting to eat raspberries, blueberries, or cranberries then you’ll pay by the ounce. However, the islands grow strawberries and a surprising variety of the most exotic fruits you’ve never eaten, far beyond the typical mango & papaya options. Lilikoi, guava, lychee, and rambutan are plentiful at certain times of the year. One of your most entertaining local activities might be an hour browsing the local grocery store for menu ideas.

Restaurant dining can be expensive but there are plenty of kau kau wagons. Military bases, of course, offer commissaries and cheaper food courts. Grocery stores (outside Waikiki) help you handle your own cooking, but you’d be using loyalty cards and shopping for local foods. Hawaii has big-box store chains, too, but your lodging would have to have the storage for you to stock up on larger quantities.

Those Hawaii vacation options give you the greatest range of flexibility and recreation opportunities. But what if you’re willing to trade a little labor for your lodging and transportation?

Voluntourism and labor exchanges

The National Park Service has a wide Mainland network of volunteer labor and seasonal employment, and some of that is available here. Both Volcanoes National Park and Haleakala National Park have occasional temporary positions. If you’ve participated in this program on the Mainland then you may be ready to jump right in, but otherwise I’d advise spending a week or two at these locations exploring the programs and the facilities.

Hawaii is a popular destination for voluntourism, and most of them are outdoors working on the land or with wildlife. One of the most thorough summaries of organizations and opportunities is the Let’s Go Hawaii site, which links to other organizations and their programs. Unfortunately most of them are short-term projects, although if you’ve worked with a particular organization in other locations then you may be able to use those contacts to your Hawaii advantage. I haven’t personally worked with these organizations and I can’t vouch for their credibility or their popularity.

Another intriguing possibility is WWOOFing. By “intriguing” I mean “Sounds interesting but I’ve never done it; could be a lot of hard work.” “World Wide Opportunities on Organic Farms” is the parent organization for linking volunteers to agricultural projects in exchange for room & board. If you’re interested in sustainable living and permaculture then this is a wonderful way to learn the techniques and the lifestyle. In its harshest terms, if you’re able to weed for several hours per day then you have the rest of the day off with food & lodging. I found another review of Hawaii WWOOFing at the BootsnAll indie travel website.

If you’re willing to do your own networking then you can start at Help Exchange, where people and local organizations offer homes or nearby lodging in exchange for project work. Keep in mind that these tend to be private homeowners, businesses, farms, or monasteries looking for labor in exchange for room & board. While it’s extremely affordable, and you’re living in paradise, there will be a certain degree of occupational toil and drudgery. Again I can’t vouch for any of these organizations, and I strongly advise visiting them in person before making any decisions. This might be a good idea for your third or fourth trip to the islands, but I’d hesitate to make a commitment just based on a website and a phone call.

If you have more questions about these opportunities, or if I can make a drive-by visit on Oahu to a particular group or site, then please use the “Contact Me” box or send me an e-mail. I’d like to thank reader Chris for asking these questions. I learned a lot about these programs, and I enjoyed the research!

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Posted in Travel | 2 Comments

Lifestyles in early retirement: long-term travel

Posted on June 7, 2012 by Doug Nordman

Veteran blogger Janette from “Ground Level in Kansas” offered her feedback on the “WordAds” post about types of ads that readers want from this site:

I come here not only for me (spouse of retired Army), but for my kids (Marine family and Army family). 20 years in– we knew nothing of MOAA, Military Advantage, PenFed, or any of the retiree travel clubs. How about advertising from the Navy Lodge or Hale Koa? Your sidebar links are so good I sometimes stop by just to pick one up (knowing it would be here….) I wouldn’t mind them looking more like advertisements so I can see what they offer.

Just saying, I think you have a lot to offer and need to head military!

I also have “Contact Me” feedback from a reader:

Just wanted to tell you that I enjoyed the book very much and have left it on my desk at work for others to see and hopefully get curious about. Also wanted to say “thanks” for being a trailblazer. It seems I’m obsessed these days with financial independence and retiring at 42, once my military career is done. It’s incredibly helpful to see and read about people like you who have done the same. My wife and I would like to be able to spend a month or two a year in Hawaii as well, to get a dose of sunshine! We’ll see how it all works out. Any advice for a couple of early retired folks on how to live frugally in Hawaii for a couple of months per year? Working or volunteering somewhere in return for cheap housing?

Thanks, guys, I admit that military travel hasn’t been on the top of my mind lately. (Why would we ever leave these islands?!?) However, the military is a wonderful way to see the world (especially when the assignment officer has sent you there)– as well as a great advertising category. Let me start by mentioning the new links I’ve added in the sidebar, and then I’ll talk about one example that I actually know something about: Hawaii.

Perpetual travel

Billy & Akaisha Kaderli and Paul & Vicki Terhorst are the world-class pioneers of perpetual travel and long-term stays. They spend most of their years overseas, but Tom Wahl and the Wandering Wahls spent months traveling across the U.S. in a recreational vehicle deciding where they’d like to settle… for now. Those families have lots of advice and details on the basics that I’ll mention here: cheap airfare, traveling light, finding long-term lodging, and living like a local.

Space A

I’ve added four big-picture links to the sidebar. (Please let me know your favorites, and I’ll add them too.) First up is the Air Force’s official Space-A website for worldwide travel on military aircraft. My spouse and I have hung out in our fair share of passenger terminals around the world (and slept in some of them) waiting for “the next flight out” to get us closer to our destination. The prices are great and the box lunches… well, that’s part of the adventure. The Internet has largely replaced the last millennium’s grease-pencil status boards, but you should also phone ahead for each base’s policies on releasing flight information.

Space A can be challenging for servicemembers, even with a 30-day leave schedule. Families will need to think ahead about kid-friendly food & lodging contingencies if the aircraft breaks down on a small base in the middle of nowhere. But Space A is a dream come true for military retirees who have all year to travel and who don’t particularly care where they’re going. Even during a drawdown when fuel is tight, the popular routes still need to carry people and supplies to remote bases around the world. If you’re flexible then the Air Mobility Command can get you near your destination, and usually sooner rather than later.

Military lodging

Next up are the Armed Forces Recreation Centers (like the Hale Koa Hotel that Jan mentioned). There are actually five hotels worldwide near family-friendly cities offering low rates (based on military rank). They cater to servicemembers and their families but they may also allow civilians (your relatives) to accompany you as well. The centers are very popular and they tend to fill up months in advance, but if you’re in the area then you can frequently take advantage of their last-minute cancellations. Use their websites to research your plans, but also phone their reservations centers to ask about their wait lists. Many times we’ve been told that the Hale Koa was full weeks in advance, joined the wait list, and then been called only a day or two before our stay began.

Military lodging is the next-best accommodation to a recreation center, but there are a lot more of them. The starting point is the DoD Military Lodging website where you can look up Navy Lodges, Inns of the Corps, Air Force Inns,and Army Lodges. Once again they fill up fast, but ask about their wait lists and last-minute cancellations. Their staff also knows the surrounding area: if they don’t have a room then they may be able to recommend a night or two in the military base’s visiting officer’s quarters or a local hotel. There are fantastic beach cottages at Bellows, Kaneohe, Waianae, and Kalaeloa (where the White Plains Beach cabins are on my favorite surf break).

Civilian lodging

One last link: the Armed Forces Vacation Club. You have to validate your military status (with your ID card) before you can sign up, but then you’re able to take advantage of consolidated deals at worldwide vacation resorts. You’re generally obligated to stay for a week but prices start about $55/night. AFVC is not sponsored or supported by the military, but they’re a great source of MWR/ITT discounts and other deals. I won’t pretend that these resorts have anything to do with the “real” local culture, but they’re another cheap way to get started on your long-term lodging research.

Admittedly these good deals are available to servicemembers & retirees, but not to all military veterans. (I’m blogging for a very diverse audience, and their benefits don’t always overlap.) However, the lodges are in business to fill rooms and make money. If you have a military affiliation or a veteran’s ID, then it’s worth parsing their websites and speaking to their reservations desks. You probably won’t be able to fly Space A but you may be able to get a waiver on the lodging policies.

These are just the military-benefits options. If you can stay longer, or if you’re able to do more research before you go, then there are even cheaper lodging options. The challenge is making your transportation dates match your lodging dates, and these military lodging options can help cover the gaps while you’re arranging the really cheap local lodging deals. Even if you’re financially independent, travel is much more rewarding when you can get away from the resort and settle into the local community.

The Kaderlis, Terhorsts, and Wahls have found dozens of civilian ways to spend months on travel at very low prices without military benefits. I’ll talk a little about their advice in the next post, but please visit their websites (linked below) for a wealth of tips & tricks on living like locals instead of spending like a tourist.

Next week: living long-term and cheap in Hawaii.

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Lifestyles in Early Retirement: Habits and getting things done

Posted on May 30, 2012 by Doug Nordman

Charles Duhigg’s new book, “The Power of Habit”, already has 120 people on the waiting list at the Hawaii State Library system. (That means it’s popular!) As part of his book marketing, last week he put up a guest post about spending habits on Get Rich Slowly. So while I’m waiting to read the book, I thought I’d blog about retirement habits.

One of the quotes from Duhigg’s guest post made an impact:

Most of the choices we make each day may feel like the products of well-considered decision making, but they’re not. They’re habits. And though each habit means little on its own, over time, how we spend our money — as well as the meals we order, how often we exercise, and the way we organize our work routines — have enormous impacts on our health, productivity, financial security, and happiness.

He doesn’t mention retirement, but habits have the same enormous impacts there too.

Apparently the human brain has evolved to favor running on autopilot. If we don’t have to think about every little thing then we use less energy and we respond faster. Regrettably we don’t wake up each morning, look at the schedule on our nightstand (the one we wrote the night before), and spend the entire day carefully measuring our accomplishments against the clock and the list. Instead we start our morning habits that get us going while we’re trying to wake up. Instead of focusing our entire attention on a specific task like fixing breakfast, we’re thinking about other things. All day long we respond almost unconsciously to behavioral cues around us. Habits don’t just derail our train of thought– most of the time there’s not even a train on the thinking tracks.

Part of “habit” is avoidance. If you have to do something during your “routine” that you’d rather not do, then you’re going to unconsciously keep finding other “higher priority” things to do first. Eventually your unpopular task becomes a priority only because it’s a deadline crisis. We don’t want to live that way, but somehow there’s always something that we know we should be doing and yet don’t get started on until it’s almost too late.

Luckily for most of our lives, an externally imposed autopilot routine keeps us more or less on schedule. When we’re kids, it’s our parents and the school system. When we transition to the workplace, it’s an extension of the same routine with slightly different tasks. Even when we’re out of the workplace for the rest of the day (or a weekend, or a vacation) and we decide that “We don’t want to do anything!” we’re still carrying out our own personal routines. They may involve TVs and frosty beverages instead of workplace reports, but they’re still a habit.

You can see where this is going. For most of your life, your daily routine is imposed upon you by life’s priorities. You fill in the rest of the time with your habits. You only spend a few minutes a day planning the schedule for tomorrow, and you may not ever get around to changing your habits. What happens when you retire?

The popular joke about retirement is that you have to be responsible for your own entertainment. Well, the reality is even harsher than that: When you retire, you have to be responsible for your own habits.

If financial independence really gave us control of our own time, then we’d have our lives squared away. We’d spend an hour a day at the gym, we’d be eating a healthy diet, we’d be learning our fourth language, and we’d have read all those books on our “great literature” list. The reality is that retirement gives us even more time to spend on the habits that we’ve developed during our lives. If we tend to have the “habits” of eating too much food, drinking too much alcohol, and watching too much TV… then in retirement we’re going to be spending our time on those habits.

The other side of “making new habits” is trying too hard. If you decide to overhaul your life and fix all of your bad habits at once, then you’re rapidly going to wear yourself out. Part of that is the problem of “decision fatigue“– instead of living by habit, every new situation that you put yourself in requires you to make a new choice. Before long you’re tired of making the “right” choice, you use up all your willpower, you revert to your old bad habits (unconsciously or deliberately!) and you feel like a failure.

Retirement is still a great time to fix all those bad habits, but take it slow. Focus on one habit at a time. Make a list if you want, but only work on one habit from the list at a time. Once you’ve created that new habit and it’s really working for you then you’re ready to start on the next. Be ready for setbacks, too. You’re still learning how to be a retiree, and it may take you some time to figure out your new life. You may need different habits than you expected, or you may take on a new role in managing your household or your family duties.

I thought I had my new retirement habits all figured out, but I’m still learning.

Six months ago we completed a major demolition renovation of our familyroom. We’d been planning it for nearly a decade, and when the time was right we made it happen. In retrospect the project went very well and the contractors did a great job, but life was total chaos for several months. Every day was noisy, sweaty, and cramped. We completely exhausted ourselves trying to keep up with the daily cleaning and painting and problems decisions, and at night our sleep would be interrupted by plastic flapping in the breeze– or by a rodent exploring the new work. We stopped working out. I even dropped out of taekwondo training for a few months.

I eventually stepped on a weight scale realized that I needed to get back to taekwondo. I actually missed it and wanted to get back to it. However, after seven years of training I’d seen a number of martial artists go through that same restart, and I’d watched most of them fail at it. They literally tried to jump right back in to a workout, and they’d quickly wear out or even injure themselves.

By this point I was writing every morning for at least 20 minutes, and that habit was going well. However, I needed to add the taekwondo habit back into my life. Instead of starting each morning with the computer, I started it with basic stretches. After 10 minutes of that I’d get on the computer and start my usual routine of writing.

Some mornings that daily stretching would take 15 minutes, but I knew I needed to keep working on it. After two weeks I was surprised to notice how good I felt when I started writing. I used to sit down at the computer while I was still waking up, perhaps favoring a sore muscle or even just yawning for a minute. Now I was relaxed, awake, and ready to work.

For two more weeks, I kept stretching. I also added in a few minutes of practicing my taekwondo forms. By now I’ve learned over a dozen forms, but I still needed to spend time with my training books and videos.

I also deliberately told my instructor the date that I’d return to training. Now I was committed, and I had a deadline. There was no way that I’d try to make up an excuse to avoid it.

I returned to taekwondo two months ago, and it’s going well. Surprisingly, the break let my body heal a chronic injury. The month of stretching and forms practice helped me avoid starting any new injuries. I’m much more flexible and I’m (finally) able to hit a couple of advanced moves. I’ve learned my fifth black-belt form, too.

But more importantly, I’m still stretching most mornings and I’m still reviewing my forms. I’ve “cut back” that morning routine to just 4-5 times a week, but I look forward to it. It’s become part of what I do… and it’s a habit.

Another indulgence I carried into retirement was Windows Solitaire. It’s actually a minor rebellion because my military commands forbade even having these little casual games on workplace computers, let alone using them.

However, even that little amusement can become too much of a good thing. When I’d be waiting for my computer to start up a program or a website to load up, I’d distract my impatience with a little Solitaire. After a few years I noticed that my competitive nature meant that I’d spend 15-30 minutes getting my score up instead of doing my computer work. If I was tired or if the writing wasn’t going well, then I’d spend an hour pondering the writing problem playing Solitaire while I was waiting for inspiration to strike.

I inadvertently got rid of the need for the habit: I finally upgraded our PC to Windows7. It’s much faster. There’s no need to play Solitaire while I’m waiting for the operating system or the Web browser to catch up.

I was curious whether I could break the habit, so I deleted the Solitaire shortcut from my desktop. I could still go find the file and start it up, but that would take more effort than just clicking the desktop icon or the Start menu.

However, having to find the file was a huge revelation: I’d been clicking that little icon a dozen times a day. Sometimes it had been frustration with the computer, but mostly it was a habit that had grown out of control. It’s been three weeks so far, and I miss it less every day, but I still miss it. I know now, though, that I’m going to break the habit. I’m going to add a couple more gigabytes of RAM to this old machine to help speed things up even more, but I’ve also learned that I need to take an occasional writing break to do something else.

Next week marks my 10th year of retirement. You would think that I’d have it all figured out by now, but apparently I’m still learning.

Those little successes over the past few months have added up, and I’m clearing out a lot of the project backlog. Letters are getting written, research is getting finished, new plans are being developed. I feel much more productive. I enjoy seeing all the things that I’m getting done, and I’m looking forward to more.

Now I just have to wait for those other 120 readers to finish Duhigg’s book…

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Posted in Military Retirement | 5 Comments

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