Wednesday, October 29, 2014

RV gasaholic

Dear Dr. R.V. Shrink:
My husband thinks he is Warren Buffet, but in reality he has a hard time deciding what to take at an “all you can eat” buffet. Since we retired and started living most of the year on the road, he has way too much time on his hands. He is always coming up with cockamamie ideas. Lately it is saving money on gas. Now that gas is low, he wants to invest in a gasoline option. He says that will lock him in at today’s price, so it won’t matter how high the price of gas goes, we will be pegged at this low point of entry. Should I just gas him and lock him in at this point. I am at wits end. I am so sick of hearing this mumbo jumbo. He has no clue exactly how this works. He has never invested in the commodities market. Should I make him go see an adviser? Help me quick.
--Fumed in Fremont

Dear Fumed:
There is a good amount of money made everyday in the commodities market. It all comes from the people that make bad judgments. Your husband has no business being in a risky trade he knows nothing about. It’s very risky for the pros. If he insists on trying to lock in a profit from the low oil prices of this minute, maybe he should consider something less volatile, like a blue chip oil major. Their stocks are down at this point. They often follow the price of oil. There is nothing to guarantee it won’t go lower, or be much higher by the time this publishes in a few days. Unlike a futures contract, you and your husband can hang on to a well-managed, dividend-paying stock. When the price of oil goes back up, they will benefit, the stock will most likely appreciate, you will receive a dividend and if you like, you can subtract any profit from your gas bill. If your stock goes south, at least you won’t be sitting by a pier somewhere, waiting to take delivery of 42,000 gallons of unleaded fuel your husband bought and refuses to sell at a loss. Don’t send him to an adviser. Wall Street is littered with the burnt-out shells of people with advisers. Consider the fact that an adviser or managed fund charging 1.25% annually will cost you $125,000 over 10 years on a $500,000 portfolio @ 8% growth. You can buy a lot of expensive gas with that dough -- and your adviser is! Yes, I guess you should just lock him up.
--Keep Smilin’, Dr. R.V. Shrink

Wednesday, October 22, 2014

Smoke and mirrors

Dear Dr. R.V. Shrink:
I liked your take on Medicare last week, but that is not what makes us nuts. How about taking a shot at cell service. We just started traveling and can’t decide what we should do. We have talked to dozens of other RVer’s and it seems everyone has their own favorite. There are more cell plan offers than Medicare ever thought of, and we are more confused than our foreign speaking GPS. (That’s another story. I won’t go there right now). Please give us some advice, or we might just stop communicating with the world.
--Smoke and Mirrors in Minot

Dear Smoke and Mirrors:
Cell plans are much like insurance. Companies have the same business plan, Confuse and Conquer. It takes as much homework to find a deal that fits your needs and budget, as finding a decent policy. To keep your sanity you need to do a few things regularly. The most important would be to read and understand your bill.

AT$T (that’s not a typo) was just ordered to return to customers north of 100 million dollars for false charges. That money was only returned to people who don’t read their bill. Because the people that do, never let them have it in the first place. Verizon has stopped overcharging me because I would call them every month to get the forty cents or a buck back that they overcharged me. No questions asked, they would just reimburse my account. Do the math--they have 20+ million customers. If they can slip a few million accounting mistakes past them every month it really good for the bottom line. Once I discovered how many people don’t read their bill, I bought Verizon stock. The dividend keeps rising--I wonder why? The point is--read your bill each month.

As for service, you would be better off sticking with the company that has the most coverage. At this time, that would be Verizon. Maybe because they have the most people that don’t read their bill. Now if you are feeling a little confused, wait until you go to a Carrier and talk to their sales tag team. Usually there is a greeter who queues you up to see a sales associate. Then they start convincing you how wonderful their deals are and sell you a device that does everything but wash the dishes for you. It all comes at a steep price. Don’t you wonder why they give you free talk and text now? That used to cost big money. Now it’s all about data. That’s where they nail you. Sometimes you just have to take a leap of faith.

You are doing things right so far. Keep talking to people, reading consumer articles and tech news. Things are changing fast. In my humble opinion, I think the best deal going at the time is the Walmart Straight Talk plan. You can buy a smartphone with a Verizon chip, have no contract, and unlimited talk, text and DATA, for $45 a month, plus tax. It’s 3G service and no roaming. No roaming means your phone won’t pick up another carrier's tower if you are out of range of your carrier's tower. We are going on our 3rd month of this service with a Verizon phone and have logged over 4,000 miles from the Midwest to the West Coast. We have only been out of service in some of the most remote areas we backpack in. We have never been throttled on our data, and never have to worry about going over. So good luck, read your bill and don’t talk on your phone when driving.
--Keep Smilin’, Dr. R.V. Shrink

Wednesday, October 15, 2014

Planned Seniorhood

Dear Dr. R.V. Shrink:
We retired early and took our Social Security at 62. We have been on the road full-time for four years. This year we both have to decide how to take Medicare. It is driving my husband crazy. He says it is more complicated than a corn maze. He has been online studying and stewing about it for two months now and still hasn’t come to a decision. Time is running out to make that decision and I can’t seem to get him to pull the trigger on one plan or another. Should I lock him in the trailer and refuse to let him out until he decides, or is that too harsh? He doesn’t appreciate my input because I haven’t studied it at all and have no idea how to proceed. I look to him to make this decision and I don’t know how to get him to jump.
--Medinuts in Medford

Dear Medinuts:
The way insurance works is simple. Most companies have a very uncomplicated business plan--Confuse and Conquer. Medicare works the same way. Instead of having basic coverage that just kicks in when you reach 65, they have multiple choice plans, with multiple choice plans within the plans. I can see how your husband is totally confused. The problem is, he has to make his choices.

Everyone has a different set of circumstances, so it takes a bit of homework to figure out which combination of options work best for you. It sounds like he has done his due diligence. Here is how I decided. This may not be your solution, but it may give you some guidance as to how to attack the problem. I found a copy of the Medicare guide book and read it a couple times. Then I called a local Medicare facility and asked questions on things I found totally confusing. Once things started to focus more, it was not all that confusing for me.

I am highly suspect of insurance companies. So when my mailbox started filling up with bazillions of offers to buy into a Medicare Advantage Plan I personally became suspicious. When I called about Medigap Plans I was always being routed to the Advantage cubical of sales people. This was another red flag for me. As a full-timer, I decided I did not want a network plan. With Original Medicare I can go anywhere I want that accepts it. I also found that with an Advantage Plan I would have to go see doctors A and B before I could see doctor C. If I want to go to doctor C, I would rather go direct. If you want to go with an Advantage Plan, pick one and get it over with, but read the fine print.

If you don't want to go with an Advantage Plan, and you stick with Original Medicare, here is a starting point for your husband. You get Medicare A, and Medicare B will come out of your Social Security. Easy so far, right? Now you hit Medicare Plan C. It has a whole alphabet full of sub-plans. You will notice that Plan F is the most expensive because it covers 100% of deductibles and co-pays. What many people miss is that Plan F has a high deductible option (HD). It is a very reasonable premium and tops your cost out at just over $2,100. Out of all the alphabet soup deals I studied, this looked like the best deal for the least dollars.

Then we get to Plan D, which stands for DRUGS. By this time you need drugs just to focus and make a decision. If you are in need of regular drugs, you are going to deal with the donut hole for several more years. It won’t matter if you are in an Advantage Plan or Original. Most communities have a Senior Help Center that will sit down with you and give you a step-by-step walk-through plan options. Another thought for Veterans is the VA can be part or all of your plan, if you so choose.

I wouldn’t lock your husband in the trailer unless you are in there with him. This decision will affect you as much as him. You should be studying this labyrinth of lunacy as hard as he is. Together you can help each other make the best decision that will cover your personal situations.
--Keep Smilin’, Dr. R.V. Shrink