YOU OFFER GOOD ADVICE ON STRETCHING YOUR MONEY SO THAT IT LASTS FOREVER
(MONEY Magazine) – October's cover package--"Retire with All the Money You'll Ever Need"--connected with many of you. For one thing, our stories eased your worries about not being able to save enough for a happy retirement. You were particularly pleased that we dispelled the myth that retirees need around 80% of their working income to live comfortably--and that we profiled retirees like Marva Douglas of Midfield, Ala. (pictured here) who are enjoying life on lots less. Douglas, in fact, is doing quite nicely on $19,000 a year, down from the $48,000 she earned while working. Readers also praised the cost-cutting and investment strategies we spelled out for both retirement planning and retirement living. And, as always, you passed along tips, offering advice on how to stretch your income and assets so the money lasts the rest of your life. We are publishing a sample of the mail here.
Congratulations on your excellent October articles on retirement planning. I particularly applaud "You Can Afford the Lifestyle You Want" because it disputed the myth that retirees need 70% to 80% of their pre-retirement income. One quote from your article says it all: "Your lifestyle is a function of what you spend, not what you made last year." I live on 35% of the income I bring in now, while working. Why would I ever need 70%, let alone 80%, when I retire?
Sadly, many people pursue more and more material possessions as their incomes rise. The key to a good life in retirement is to develop discipline and fiscal responsibility young and realize that more "stuff" doesn't bring true happiness. DAVE OSTERFELD Beverly Hills, Mich.
With a pre-retirement income of $250,000 a year and a current income of $70,000, your cover subjects, Bill and Barbara Bixler of Portland, Ore., hardly represent the people of America. Retiree Marva Douglas, who lives on $19,000 a year, is more in line with the majority of Americans I know. It's encouraging to see that she's so happy. SUSAN M. STEINEN Bel Air, Md.
October's "Lower Your 1996 Taxes While There's Still Time" makes the sound recommendation that retirees should consider moving to a state that offers them better tax breaks. However, your article focused on income tax savings--and income tax alone will not give you a realistic comparison of tax benefits or tax traps in a particular state. I retired in Austin but chose to move to Arkansas even though Texas has no state income tax and Arkansas does. One reason for my decision: In Austin, property taxes on a 10-year-old, three-bedroom, two-bath house with a small lot were about $2,500 a year. In the Hot Springs, Ark. area where we live, our taxes on a larger, new home with more acreage are less than $1,000. So while we pay a state income tax of $700 a year, we end up with $800 more in annual tax savings living in Arkansas rather than in Texas.
Retirees may certainly save significant tax dollars by relocating to another state. But they must compare the total tax structure for each state. It is also important to base the comparison on where you would want to live within each state. JOHN R. THOMASON Bismarck, Ark.
HOW TO GET CREDIT-CARD BREAKS
After reading September's "Your Ultimate Guide to a Super Credit-Card Deal" [Your Money Monitor], I followed your tips and called to ask that the annual fee for my bank Visa card be waived. When the representative said she could not do that since I was earning airline frequent-flier miles on the card, I told her I wanted to cancel the account. Bingo! Another representative came on and offered me a free companion ticket to anywhere in the continental U.S. as long as I spent $298 on a round-trip ticket myself. I accepted with pleasure. Thank you. NAME WITHHELD BY REQUEST Phoenix
ANOTHER BANK HOLDUP
September's In Your Interest reported that banks exploit consumers by routinely taking from five to 11 business days--or longer--to make the full amount of check deposits above $5,000 available to them. Recently, my wife deposited a bank cashier's check in our Bank of America account in California. Several days later when she wanted to make a withdrawal, she was told there was an 18-day hold on the cashier's check she had deposited. Banks like these are indeed exploiting legal loopholes. JAMES V. COYNE Okeechobee, Fla.
SHAME ON IRS SNOOPS
I was shocked to see October's Your Taxes tell people how to get money from the IRS by spying on neighbors and turning them in for tax evasion. BILL JOHNSON Dayton
HEAVEN AND DOWN-TO-EARTH ADVICE
What do I think of MONEY? let me put it this way: For 15 years I was the single, head-of-household mom raising four teenagers. I really got through that period with the help of a rosary in one hand and my copy of MONEY in the other! ANN BRAUN-KAPLAN Delray Beach, Fla.