Money, Money, Money!!

Or lack thereof!

For the last few years, Mark and I have owed money to the Feds for taxes. In the past, we had two deductions we no longer have: MD state tax and Evey. Last year when we owed, I sent the appropriate form to the MD retirement office asking for them to withhold additional federal tax. I sent it in April, but they ignored it. My pension has been taxed at the ridiculous rate of 9%. Combined with Mark's income, that is grossly under-withheld. Then in 2011 I made a large withdrawal from my TDA to cover Evey's wedding. Although the company withheld 20% for the Feds, combined with our two pensions, we are still grossly under-withheld. We owe several thousand on our taxes this year. UGH!

So...I sent the appropriate form in to the MD retirement office AGAIN in January. I had to email and call them because for two months it was again ignored. Finally, my deposit today shows that they took the extra tax, BUT wait! They ALSO took the extra tax that I asked for LAST year, too. A double whammy! My pension this month is now $550 LESS than I had before. I had only wanted $275 withheld. Sigh. When it rains, it pours.

I just spent over an hour looking at how to cut my monthly expenses and make this work. My plan is to live with this very austere budget for four months until my SSI kicks in on August 1. I know that it will be more than enough to cover the difference and still save most of the SSI for my big trip to Hawaii in 2014. If I can live with it all year, I should have a whopping income tax refund next year for the first time in a very long time. Then, I'll probably try to have the state modify the withholding once again to a more realistic number in order to break even each year. Craziness!

It's not like I haven't lived paycheck to paycheck and nickel-and-dimed everything most of my life because I have. I just didn't expect to do it in retirement. So far, I haven't been. We've been playing and having a good time. I've been able to give presents, eat out, and make donations to things whenever I felt like it. I can cut back for the next four months, but I don't have to like it. LOL!!