Quicken offers free online service

If you have several bank and brokerage accounts, credit cards, a mortgage, and a retirement savings account, and you want to have a single web-site to view them all, you have a couple of great choices.

I've been using Mint.com for several months, but the ad presence has been a bit annoying to me personally. Then I read about Quicken's online service. Like Mint, it's free, and I found that it only took me about 15-minutes to enter my accounts into the system. The upload was fast, and quickly I was able to see all of my recent transactions.

I've been a Quicken customer for many years, so the interface was familiar to me. What I haven't figured out is how to enter assets to offset my liabilities. For example, I can depict my outstanding mortgage, but I haven't found a way to enter the value of the house.

Quicken will save you alot of time if you periodically monitor all your accounts. This will simplify your financial life!

Southern California Living

In my previous post, I suggested a living budget of $80/day or $160/day for a couple. Military.com had listed Oceanside, CA, near Camp Pendleton, as among the top five cities for military families, so I started my search there. My budget was a monthly mortgage payment of about $1200 with a $70K down payment and annual property taxes of about $6,500 (remember, it's California!)

Here's what I found. It's a 3 bedroom, 2 bath home built in 2005 and is located just outside Oceanside in the city of Temecula. Temecula has been hammered by the financial downturn, and has lots of real-estate-owned and other foreclosure homes available right now. This house is has more than 1850 square feet of space, and is in a highly rated school district. The mortgage payment would be just a few dollars over $1200.

If you insisted on staying in Oceanside, you could live here. This older home has 4 bedrooms, 2 baths, and has more than 1750 square feet of living space. The price tag is less than $200,000 or a payment of about $1,260 per month. This amounts to about $42/day leaving you $118/day to live life the way you want to live it. I say buy a sailboat and tie it up at Camp Pendleton's marina.

Living on $80/Day

I'm a fan of Paul Terhorst, who retired young, wrote a book about the experience, and now travels the world with his wife. His home page tells the story, and always offers a picture to go along with the words.

In his book, "Cashing in on the American Dream," Mr. Terhorst recommended living on a $50/day budget. The book was published by Bantam in 1988, so that $50 today would be worth about $80 (based on a 2.5% rate of inflation.) So, for a couple, could you live on $4800/month? I definitely think so! Where do you come up with that money as a military retiree? If you live like the Terhorsts do, you'll sell everything that has real value, including your house and car, convert your money to interest bearing accounts, and hit the road and never look back.

More conventional types will purchase a modest home in an inexpensive region of the country and set their budget based on the $4800. 25% will go to housing, or $1,200/month. Can you buy a house for that? That or less in many parts of the country, especially now! The rest will go to necessities like food, insurance, utilities, transportation and so on. Your health care is taken care of by Tricare for life, just remember to budget for your deductibles and co-payments. You'll still have money for plane fare for Europe!

Next time, I'll research some home purchase examples from among the areas that I'm considering for retirement, like Oceanside, CA.

Could you eat on $1 per day?

If you think it's impossible, check out the recipes and ideas that were linked through military.com.

They include:
Lentil Soup
PB&B Wrap
Tuna Wrap
Oatmeal with currents, raisins, mixed nuts.

Here's the page.

One key to savings is to eat what you buy! If your routine is like mine, the shopping trip begins with throwing old dairy, fruits, and vegetables in the trash. What a waste.

In Asia, where homes, kitchens, and refrigerators are small, people shop for a day or two at a time, walk past fresh food stands to pick up their dinner ingredients, and never throw anything away. We can learn a lot through these examples.

Home sales gain exclusion on your military home even if you haven't lived there in 13 YEARS!

I had written earlier that a good technique would be to buy a home at the 5-year mark, take out a 15-year mortgage, then return to the home after retiring for 2-years to gain the home sale gain exclusion and not pay capital gains tax. Well, it turns out that if moving back to the house isn't in you plan at retirement, you might not have to do it. According to the IRS web site, military members who are on orders that take them at least 50 miles away from their principle residence may suspend their occupancy test up to ten years.

Here's the example they site:

Example #1 — Lt. Green owned a house in Georgia and lived there from December 1988 until deployed overseas in January 1991. When he returned to the United States in July 1999, he was stationed 90 miles from the house. Preferring not to commute this distance, he sold the house four months later, realizing a gain of $150,000. Because he had not used the house as his principal residence during the 5 years preceding the sale, he reported this capital gain on his 1999 return. Under the new law, he can disregard both the 8½ years he was overseas and the 4 months after his return to the States, since he was stationed more than 50 miles from old residence. His five-year test period for ownership and use now consists of the 5 years before January 1991, when he went overseas. Since he owned and lived in the house for more than two years during this test period, he may exclude the gain on the sale. He must file an amended return by Nov. 10, 2004, to recover the capital gain tax paid on the 1999 return.

This law went into effect in 2003, but I just recently heard about it. It's a great tool for military families who own a home from a previous assignment.

Great cities to retire to

Yahoo! finance news posted a story today about 10 great cities to retire to.

Here it is:

Here are 10 great affordable places to retire.

1. Binghamton, NY
2. Chattanooga, Tenn.
3. Cocoa, Fla.
4. Eau Claire, Wis.
5. Montgomery, Ala.
6. Omaha, Neb.
7. Pittsburgh, Penn.
8. Roswell, NM
9. San Antonio, Tex.
10. South Bend, Ind.

For military members, from this list, check out Montgomery, AL, Omaha, NE, and San Antonio, TX. They are all close to really terrific military facilities.