By Janet Groene, F47166
Although most of this month’s column contains information for new and soon-to-be full-timers, veteran full-timers might take a look at it as well to avoid any potholes in the road ahead.
The transition into full-timing is not the same for everyone, because we’re all different. Much depends on whether you are fully retired with enough income for all your needs, partially retired and in need of part-time work, or have no retirement income and must work to support your lifestyle. More and more full-timers are in their 40s and 50s, and fully in the workforce. Some are even younger and must work virtually full-time for current income as well as to fund a retirement account for a carefree future.
Here are some things you’ll be glad you took care of before joining the ranks of full-timers.
- Save as much as possible before you stop working. Before you cut ties to the old life, have enough money on hand to cover expenses for at least three months. That doesn’t necessarily mean cash, but funds you can get your hands on in an emergency without having to pass a credit check, pass the hat, or sell your spare tire. A supply of foodstuffs and spare parts counts, too. Never let your reserves run too low. Haste (such as having to settle for a second-rate job) and desperation (getting a cash advance on a credit card) are very costly in the long run.
- Don’t leave your job without knowing exactly what you have in terms of health benefits, and how much you will receive from your pension, retirement plan, a cash payout, and so on. Would it be smart to leave your savings in the company credit union to get the best interest rates, or to get your RV loan there at low, credit union rates?
- Can you continue to be enrolled in your employer’s group health insurance plan? What would be the cost and how long would you be allowed to stay on the plan? What will you do after that? It’s vital to have a follow-up plan in place long before your insurance coverage expires, because new policies typically have a waiting period before benefits begin, a pre-existing clause, or an enrollment window of only certain dates. An advantage of working for temporary employment agencies such as Kelly Services or Manpower is that benefits, including health insurance, are available.
COBRA (Consolidated Omnibus Budget Reconciliation Act) is a federal program that allows people who work for a company that has 20 or more employees to keep their employer-sponsored health insurance if they are laid off, downsized, or otherwise leave the job. COBRA also applies to those who lose health benefits because of divorce, legal separation, or the death of a spouse. Coverage can last up to 18 months or, in the case of spousal benefits or dependent children, as long as three years. The upside is that you can go full-timing with complete health coverage with no gaps, no waiting period, and no physical exams that might reveal pre-existing conditions. The downside is that you pay the full cost of the coverage, which may have been fully or partially paid before by your employer. The sum will probably surprise you.
Details on COBRA are available from the Department of Labor Web site at www.dol.gov/dol/pwba/public/pubs/cobrafs.htm. Or, call (800) 998-7542 to request the free booklet “Health Benefits Under COBRA.” In addition to the federal law, some states also provide for a mini-COBRA program. Your company’s human resources department can supply details. You likely will need to apply in writing to the health insurer within a short time after leaving your job to ensure uninterrupted coverage.
If you’re turning 65 and need information about Medicare, call (800) 633-4227 or visit www.medicare.gov. Honorably discharged veterans also can get medical care through the Veterans Administration (check your local phone book for the nearest hospital or clinic), usually with a co-payment that is figured according to income. Those with low incomes can apply for Medicaid, a joint federal and state program that varies from state to state and should be considered a last resort. Private, non-group health insurance quotes are available at Web sites such as www.ehealthinsurance.com.
- Do you understand all the tax consequences of your pension options, including, perhaps, a deferred payout that won’t kick in until you’re 55 or 60? If you have a choice, decide whether it’s best to choose a larger payment for your lifetime or a smaller check that would continue to pay through your spouse’s lifetime if you should die first.
- Have you taken steps to roll over your retirement plan into an individual retirement account (IRA) for maximum safety, income, and flexibility? The Enron collapse was yet another lesson — for those who needed one — about having too many eggs in one basket.
- Do you own company stock options? If so, you have to exercise them within 90 days of leaving the company. Look closely at the profit-loss scenario in light of the dates your options were granted and the dates you sold stocks purchased through those options. That determines whether the profits are taxed as regular income or capital gains.
- Make sure you do all of the above for your spouse as well. Understand each other’s benefits and what they mean to you as a couple.
- While you still have a job, your credit picture looks better, so this is the time to finance a motorhome, get a home equity line of credit on your house, or apply for a high-limit credit card. This also is the time to get a telephone credit card if you want one. After full-timing for a while, you can switch if something better comes along.
- Conduct a complete financial inventory. You may have assets you have forgotten about, such as accumulated life insurance dividends that you could cash in with no penalty.
- Do a credit check on yourself even if you have no debt, have never missed a payment, or otherwise think your credit is good. To purchase a credit profile, contact one of the following credit bureaus: Equifax, (800) 685-1111, www.equiifax.com; Experian, (888) 397-3742, www.experian.com; or TransUnion, (800) 888-4213, www.transunion.com.
Perhaps you co-signed for a loan on which someone else defaulted; or, you refused to pay a disputed bill because the service or product was substandard; or, you forgot about a student loan. Maybe you are being blamed for debts incurred by someone with the same name as yours or a name like yours. The time to straighten such problems out is now rather than when you’re on the road.
I visited all three Web sites and called the three toll-free numbers, and learned that getting any credit report is a long process. Allow yourself plenty of time to put your request in writing and include many personal details, including your date of birth and your Social Security number. The cost of a credit report is less than $10 in most instances, and it may take a couple of weeks to reach you, even if you use the Internet.
- If you’ve been laid off, file for unemployment insurance at once. To find out how to file for benefits in your state, go to www.workforceatm.org or call the local department of employment services for information. Laws vary state by state and payments nationwide can be as high as $500 a week, although the average is approximately $200. In most cases, you are not eligible to collect unemployment insurance if you’ve been fired for sufficient cause or if you haven’t worked for the company four of the past five quarters. You also may have to file regular reports on your job search efforts to continue receiving benefits.
- Pay off your debts as much and as quickly as possible, especially if you have borrowed against your 401(k) plan. After leaving a job, you have to repay the loan within two months or pay income tax on the money, plus any penalties. Pay off your credit cards and start with a clean slate, preferably with new credit cards that charge lower rates, pay a rebate, or charge no annual fee.
- Get a thorough physical checkup before you move into your motorhome, not just to take advantage of existing health insurance benefits, but for many other reasons. First, you’re still seeing doctors you know and trust, and who know your case history. Second, you’ll have better things to do on the road than have your gall bladder removed or your hernia repaired. If a procedure must be done, better now than later. Third, a checkup might disclose problems you didn’t know you had. If you have the early signs of macular degeneration, a pre-cancerous skin lesion, glaucoma, or borderline diabetes, get treatment for these diseases before they worsen. They’re not just a threat to your physical well-being, but could keep you from getting new health insurance when you need it.
- Review all of your insurance coverage in light of your new life, because the best coverage at the best rates may require new policies and/or changes to your old policies. For example, if you’re retired and your spouse’s income is important to your plans, you may want a new life insurance policy or disability insurance policy on your spouse.
Make sure the right beneficiary is named in your life insurance, and that you have coverage for the loss of valuables, such as jewelry or rare coins, that travel with you. RV Alliance America, C95, is one company that offers RV coverage, including the types of coverage that full-timers require, and extends a discount to FMCA members. Call (800) 521-2942 or visit www.rvaa.com. Other FMCA commercial member companies that offer motorhome insurance are listed in the “Business Service Directory” in the January 2002 issue of Family Motor Coaching magazine or on FMCA’s Web site — www.fmca.com.
Don’t drop any of your existing policies until your new insurance is fully in place. Sometimes your new mailing address will determine the cost of your insurance. Depending on whether your home base is Indiana or California, the difference in vehicle insurance could be $2,000 or more per year. Health insurance rates also are based on your ZIP code.
Discuss with an insurance agent the type of liability coverage you need. Are you covered if your awning falls on a campground neighbor or if your tennis serve gives your opponent a black eye? When you had homeowner’s insurance, you may have taken this extra coverage for granted.
A full-timer’s health oasis
The Escapees RV Club’s CARE Center provides short-term and long-term medical care to Escapees club members in a 10-acre park in Livingston, Texas. CARE stands for Continuing Assistance for Retired Escapees. The adult day-care facility for RVers has 35 sites available at this time with more being built. For information about the CARE Center, call (936) 327-4256 or visit the Escapees Web site at www.escapees.com.
Last month’s column dealt with the explosion in young full-timers, most of whom must work on the go. Several Web sites list jobs for full-timers: www.campingworld.com/jobs, www.workamper.com, www.workersonwheels.com, www.rvjobs.com, and www.seasonalemployment.com.
Life On Wheels conferences are now held four times each year. These educational sessions focus on various aspects of RVing for folks who desire to learn more about the lifestyle. For information about the dates and locations of conferences in 2002, plus descriptions of the classes offered at each conference, call (866) 569-4646 or visit www.lifeonwheels.com.
A two-month training course covering RV repair is offered by the Camping World RV Institute, (800) 356-0311. Many people who complete the course go into business for themselves. Upon graduation, students receive certificates from a variety of RV manufacturers as well as a diploma from the Institute.
Even if you aren’t shopping for a new coach, RV shows are great places to get ideas for better space utilization and new gear, and the accompanying partying and pageantry are often great fun for a weekend getaway. For a list of upcoming shows, check www.rvia.org/rvshows
Moon Handbooks: Mexico ($21.95, Avalon Travel Publishing), written by travel writers Joe Cummings and Chicki Mallan, would make a great addition to any southbound traveler’s library. While it’s not RV-specific, it’s a superb overall guide from writers who know Mexico well. The paperback is packed with more than 1,200 pages of information about the country. The book’s small type could be troublesome for some people, however.
If you’re looking to save a little money on your next sight-seeing trip to New York, Boston, Philadelphia, Chicago, Seattle, San Francisco, or Hollywood, purchase a CityPass booklet. The CityPass is good for reduced admission to several popular museums, discounts, and transportation worth far more than the purchase price. The price of the booklets range from $30.25 (for Boston) to $59 (for Hollywood, which also includes admission to Universal Studios and six other attractions). To purchase a CityPass, visit www.citypass.com/what or stop by one of the participating attractions. A list of the attractions for each city is available on the Web site.
The Orlando Magicard is good for up to $500 in discounts at restaurants, accommodations, shopping, and attraction admissions, and is free from the Orlando Convention and Visitors Bureau. Simply request the card when calling (800) 551-0181, order it online at www.orlandoinfo.com, or ask for it at Orlando’s Official Visitor Center, located at 8723 International Drive in southwestern Orlando, near the Orange County Convention Center.