Money Talks: Solar Panels
Friday, October 18, 2019
Let The Sunshine In!
For quite a while, I’ve been interested in solar. Fifteen years ago, when I began investigating, there was no one in Mississippi selling or installing solar systems. It seemed just a pipe dream.
Lately, more and more companies are popping up to provide this service. So I decided it was time to get serious. The other thing that pushed me to pursue this option was the lucrative tax credit offered on a solar installation and the fact that this credit was disappearing at the end of the year.
I had to convince my husband to go down this path. Wouldn’t the panels on the roof of our house detract from its appearance? Would future buyers really care about having solar panels? Did this really make financial sense?https://www.nerdwallet.com/blog/finance/save-money-putting-solar-panels-roof/
We met with two different companies. The first was all sales. There was no schematic showing where the panels would be located. No spreadsheets showing usage and payback period. Just a promise that the sun would provide ALL our electricity, and we would only pay a small connection fee each month. Wow! That sounded great.
Of course, if you install solar panels on your roof, you need to consider the age of the roof. Solar panels are designed to last about 25 years, which matches the age of a new roof. If you put on a new roof 10 years ago, this changes the calculation. Most installers prefer to put their panels on a new roof. So now you’re not just paying for solar panels, you’re paying for a new roof.
Of course, we were told if you couple the two, you may be able to get the tax credit applied to BOTH the panels and the roof. That sounded appealing. What is the tax credit, and when does it expire? It’s 30% of the cost, and it IS a credit, not a deduction. That means a dollar for dollar savings on about a third of the project. To qualify for the year-ending tax credit, I would need to sign up quickly (or so I was told).
A few qualifiers…
You are only supposed to take the credit on roofing for the portion of the roof actually under the panels. And in order to get the full advantage of that credit, you need the income (and the tax associated with it) that is big enough to offset that 30% break. Many retired people don’t have enough tax to pay now to take full advantage. Again, a change in calculus.
The second guy showed up with a laptop full of charts and graphs. He pointed out the direction the house was pointing, how the sun changes during the year, and the many shade trees surrounding our roof. He climbed on the roof with his many gadgets to verify his estimates. Full electricity? Not so much. He expects we could supply about half of our electricity with solar, and this would take many more panels than the first group suggested.
And now we’re confused. I really wanted to go solar. It seems like a great idea. We would be using a renewable resource. If the power company keeps getting rate increases, won’t that eventually pay off?
Turns out our payback period would be about 12 years, under a generous set of estimates. Also, we would have to load up our roof to get the most of the system. My husband is shaking his head now. Ultimately, the overall cost of panels and a new roof was now hitting the $40,000 to $50,000 range. Even with a generous tax credit, the dollars made my head spin.
One caution—many solar companies sell customers on a system by offering financing that matches what you were paying on an electric bill. Sounds good, right? But the rate on those financings is in the 7-8% range—not cheap! Also, what happens if you sell the house before you pay off the loan? Maybe you move, but you still have to pay that monthly bill.
We planned to pay the full bill up front to make this a purely economic decision. The problem we encountered is that our electricity is pretty cheap. The price per kilowatt in our area makes going solar unreasonable. I tried. I really tried, but in the end, it just didn’t make sense.
So we’re not going to spend $40,000 to $50,000 on an environmentally friendly and sustainable source of energy. We’re not going to be the progressive family in the neighborhood doing our part on climate issues. I had to give up my pipe dream.
Instead, I’m going to redo the kitchen.
Money Talks: Medicare
Eleanor Laise, Senior Editor from Kiplinger, is our guest expert leading the discussion of Medicare.
Here's the link to a recent article that Ms. Laise wrote: https://www.kiplinger.com/article/retirement/T039-C000-S004-navigate-2020-medicare-changes-open-enrollment.html
We had a lot of websites and phone number given out. Here they are for you to read:
You can also get information on your most recent claims without having to speak to a customer service representative. Please be sure you have your Medicare number available before calling. • Listen to the status of your claims. • Find out your current deductible status. • Listen to your current prescription drug plan enrollment. • Get more help with your Medicare questions. • Order Medicare publications. (Some are available in large print, Spanish, audio-tape, and Braille.) You can hear a recording with answers to frequently asked questions, and can order publications 24 hours a day, 7 days a week. You can talk with a customer service representative 24 hours a day, 7 days a week.
medicare.gov There's a wealth of information on this site.
mymedicare.gov Provide your user name and password or create an account.
1-800-333-4114 or medicarerights.org The Medicare Rights Center is a national, nonprofit consumer service organization that works to ensure access to affordable health care for older adults and people with disabilities through counseling and advocacy, educational programs and public policy initiatives. Counselors are available Monday through Friday, and are happy to answer your questions about insurance choices, Medicare rights and protections, payment denials and appeals, complaints about care or treatment, and Medicare bills.
shiptacenter.org or 1-877-839-2675 State Health Insurance Assistance Program (SHIP) A state program that gets funding from the federal government to provide free local health coverage counseling to people with Medicare.
benefitscheckup.org The National Council on Aging provides information about Medicine, Health Care, Income Assistance, Food & Nutrition House, Housing & Utilities, Tax Relief, Veteran, Employment, And More. There are over 2,500 beneﬁt programs available nationwide. Find out what beneﬁts may be available in your area.
Money Talks: Holiday Debt
We’ve gathered together some tips from various articles to discuss Holiday Spending today.
Listen to our experts from New Perspectives https://www.newper.com/ thoughts on these tips:
Stick to your budget:
- Plan how much you’ll spend on gifts, food, drink, and decorations
- Allocate a dollar amount of what you want to spent and who you will shop for. Tally up what you’ve already spent so far if you shop through the year and be aware of what you already bought and what you’ve already spent.
- Make a list of who you need to buy for and what you want to buy. If you’re not sure who will be attending the family dinner, call and ask the hosts or look back at last year’s pictures. Knowing who to buy for will help you avoid buying “stuff” just in case you missed someone.
- Holiday debt can linger for months, straining your household budget and even limiting your ability to save for retirement and other goals
- While planning this year's holidays, start thinking about how you'll save money next year.
How to pay for your gifts:
- Use Cash: it can help you control and understand your spending limits.
- If you want to use a credit card use only one credit card. If you have several, choose the credit card with the lowest interest rate and leave all the others at home. Using only one card also makes it easier to keep track of what you’ve spent. Once you’ve bought for someone, cross them off your list so that you don’t keep buying.
- Avoid signing up for store credit cards: You’re ready to pay – and just as you reach into your wallet the cashier says “would you like to sign up for our store credit card and get an extra 10 percent off?” They’ll offer you 10 percent off that day but charge you 4 percent every other day that you don’t pay the balance.
- Don’t buy gifts for yourself: Twenty-two percent of Americans buy gifts for themselves when they are shopping for others.
- To build your holiday budget, trim discretionary expenses over the next couple of months. Cut back on dining out or going to the movies, or temporarily cancel a couple of monthly subscription services.
- Sneak into the Mall - Avoid Busy Times and Impulse Shopping. Pick off-peak times to actually do your shopping. Hitting the stores during the day might save you some time and help you avoid impulse shopping.
- Eat before you go and take a bottle of water along. This will help you from spending extra money.
- Shop online to avoid spontaneous purchases - Buy as many gifts as possible online to avoid the temptation of picking up extra bits in the shops. Retailers are dab hands at enticing shoppers with beautiful Christmas displays.
- Start buying presents now - You still have two (possibly three) pay checks to go until Christmas so start your present-buying now if you can. Buying just one or two gifts this month will take the pressure off mentally and financially. Panic buying is the easiest way to blow the budget!
- Black Friday and Cyber Monday can offer big savings, but you might find better deals at other times. Start checking prices now so you know what's a good deal — and what to skip.
- Being frugal with holiday meal shopping can go far. Let go of some food traditions and focus on what your eaters like. You’ll have less food waste and less money waste.
What to buy:
- Kids - One or two favorite toys is better than a mountain of toys and is less expensive. By buying something they can do or play with right away, they don’t think about how much or how little they got – they’re too busy enjoying their time playing with what they have!
- Spouse - Consider not exchanging expensive gifts with your spouse. Buy a game that the whole family can play together, a DVD for family movie night, and some treats that will become part of what you serve when guests or family stop by.
- Think Free: Save Money With Homemade Gifts. Look at your shopping list and decide if you really need to buy for everyone on the list. You still have time to make some personalized gift certificates for those who would value your time, company or help over a store-bought item. Think about babysitting for new parents, helping an older aunt or uncle around their home, or taking a grandparent out for a drive followed by dinner at your house. Homemade gifts can save money, but they also come from the heart which can put a real twinkle in someone’s eyes.
- Do Secret Santa with family/friends - If you usually buy for all your family and friends, talk to them now about doing Secret Santa. Explain that you’re trying to keep your spending under control this year and that you’d rather buy one person a slightly more expensive present.
Money Talks: October Open Topic Episode
Dr. Nancy Lottridge-Anderson, President of New Perspectives and Ryder Taff, portfolio manager at New Perspectives are our expert hosts.
Nancy and Ryder are both Chartered Financial Analysts and Ryder also holds the Certificate in Investment Performance Measurement from the CFA Institute.
We didn't get to many October buys / don't buys due to phone calls. Find that information from these websites:
Tasks for October? Check out this website for advice: https://www.moolanomy.com/6247/financial-checklist-of-important-tasks/
incharge.org has a calendar of when you should do what each month.
· Reminder: if you filed an extension to file your federal income tax return in April, October 15 is the deadline for extensions.
· October 1 is the starting date for the Free Application for Federal Student Aid, or FAFSA.
Our episode from September 3rd, 2019 featured 529 College Saving Plans http://moneytalks.mpbonline.org/episodes/money-talks-529-savings-plans
Phone call questions dealt with:
401K Rollovers, What do to with funds when you sell your home, Investing, 529s, Adviser's responsibility, Taxes on Social Security.
Money Talks: Mutual Funds
Our chartered financial advisers,Dr. Nancy Lottridge-Anderson, President of New Perspectives and Ryder Taff, portfolio manager at New Perspectives.demystify this diversification tool.
Ryder mentioned Morningstar as an information source https://www.morningstar.com/funds
Money Talks: Budgets
We used as our guide for today's show: How to Choose the Right Budget System from Nerd Wallet https://www.nerdwallet.com/blog/finance/how-to-build-a-budget/
Examples of 4 types of budgets systems are THE 50/30/20 BUDGET, THE ENVELOPE SYSTEM, PAY YOURSELF FIRST, and THE ZERO-BASED BUDGET
· Automate your savings as much as possible so the money you’ve allocated for a specific purpose gets there with minimal effort on your part. An accountability partner or online support group can help, so that you’re held accountable for choices that blow the budget.
· Revisit your budget as needed. Your income, expenses and priorities will change over time. Adjust your budget accordingly, but always have one.
Money Talks: Financial Goals
Our hosts are Dr. Nancy Lottridge-Anderson, President of New Perspectives and Ryder Taff, portfolio manager at New Perspectives. Nancy and Ryder are both Chartered Financial Analysts and Ryder also holds the Certificate in Investment Performance Measurement from the CFA Institute. https://www.newper.com/
FINRA: the Financial Industry Regulatory Authority suggests how to approach setting your goals. https://www.finra.org/investors/personal-finance/set-your-financial-goals
College Savings Calculator: https://tools.finra.org/college_savings/
Retirement Calculator: https://tools.finra.org/retirement_calculator/
Money Talks: Save Cash To Invest
Do you need to save money on your regular expenses to have money to invest for retirement?
We'll share some money saving tips from AARP's 99 Great Ways to Save https://www.aarp.org/money/budgeting-saving/info-2019/top-ways-to-save.html and our expert, Ryder Taff https://www.newper.com/ will comment.
Reimbursed ATM Fees: Most online banks and some traditional banks will reimburse you for fees incurred when you use another bank's ATM. That can save you an average of $4.68 per transaction.
Hire a Haggler: Not a negotiator? Companies like Billfixers and Billshark will haggle with your cable TV company or other service providers in exchange for a cut of your first year or two of savings. Billfixers says it saves clients $300 a year.
Property Tax Breaks: Many states offer property tax breaks for homeowners over 65, including rebates, caps on assessed value, and tax-rate or assessment freezes. In Mississippi: Persons 65 years or older and persons who are totally disabled, who are otherwise eligible for homestead exemption, are exempt from taxes on the first $75,000 of true value on their home.
Go All In on 401(k)s: One-quarter of the workers employed at companies offering 401(k) plans don't take advantage of the full company match of the first few percent invested in the plans. That means they are missing out on an average of $1,336 in free money annually.
Mortgage Magic: A 30-year $300,000 mortgage at 4 percent costs $1,432 a month. But if you pay $716 every two weeks, you can cut interest payments by $34,000 over the life of the loan.
Credit Card Rewards: Stay on top of your points and use them before they lose value. Don't waste the cash or credits.
Get Savings Matched: Individual development accounts are designed to help people of modest means buy a house or start a business. Some programs provide up to $4 for every $1 you save. Go to ProsperityNow.org/map to find community organizations that administer IDAs. Their website has a number of enterprise development organizations in Mississippi.
Negotiate Bank Fees: Banks now charge fees even for receiving money via wires, something many customers may not realize. Be sure to check your statements, and dispute those fees if you find them — even if you need to speak to a manager. The bank needs your business. A 10-minute call may save you about $25.
Stop Smoking: Nonsmokers, exercisers and people who maintain a healthy weight can get as much as a 50 percent savings on life insurance.
Combine and Save: Companies charge up to 20 percent less if you get home and auto insurance policies from them.
Raise Your Deductible: An increase from $500 to $1,000 can save you up to 25 percent on a homeowner's premium.