The 1st 31 Years Of Retirement

Discussion in 'Personal Diaries' started by Tom Young, Sep 7, 2019.

  1. Tom Young

    Tom Young Member
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    Since I'm new here, I hid this post in my profile (for myself, as a reminder).
    Now, I feel comfortable enough to share it with anyone who has trouble sleeping, or would like to track one couple's story. Note that it was written 7 years ago.
    ......................................................................................................................................

    Using this long (book length) review, written in 2012 for a different website. Don't bother to read it... Too long, irrelevant... Serves to keep me in touch with things I've forgotten. Currently in stage 4 of Alzheimer's... Looking forward to finding new friends, and to what looks to be the kind of forum that I'll enjoy. Many interests and enjoy thinking outside the box.
    Regards,
    bob
    ...............................................................................................................................................
    Having kept some notes on our retirement, I am thinking to share them here as an overview of the ways my bride and I managed to stay out of the working world since 1989. We live simply, with no travel, and apart from any expensive social life, though our life in retirement communities FL and IL, is very social.
    #1'
    Everyone has different ideas on what retirement should be. One size does not fit all.I have some thoughts and experiences to share, not as recommendations, but just as food for thought.
    First, we've been retired for almost 23 years, so a lot of our experience will not be the same as yours.
    With no pension (assets from pension plan were used for starting a small business... no net gain or loss) retirement started out as "give it a try"... if it doesn't work out, go back to work... Retirement prompted by a cancer scare.
    Age 53 to age 65 was tough from the health insurance angle... Even then, before medicare kicked in @ age 65, we paid about $11,000/yr... BTW... medicare is not free... we still pay about $8,000/yr (2 persons) for medicare and supplement, and another thousand for basic Pharma.
    Social Security... Important to check with SS for your expected benefits. Just a phone call or visit to SS office. Has to do with how much you put in... Husband and wife... Higher income sets base SS for couple... If the smaller payout is less than 1/2 of the larger, that spouse gets 1/2. If the second income is over 1/2 of the larger, then that amount is paid. In my case, even though my wife worked, her calculated SS would have been less than 1/2, so she gets 1/2 of my payment. (Even if she had never worked, she would still get 1/2 of my SS. It's just the way the rules are written.)
    In my case, I had always maxed the pay in. We took SS at age 62 so it was a reduced amount. We began receiving checks in 1999, and currently receive (2 of us)(with cumulative COLA's) a total of nearly $23,000/yr. $15K for me, $7500 for my bride. That was the max at that time... it's higher now of course.
    At the time we decided to retire, we had a detailed plan... a budget... income and outgo... and looking back 22 years, despite huge variances from our initial plan, we are almost exactly on the budget.
    There are hundreds of financial planners on line where you put in your estimates of assets, and return and inflation, and come up with the amount you need to retire. In our case it doesn't work... All of the planners make the assumption that you will want to maintain your asset capital until you die... In our case, had we followed their plan, we NEVER would have retired.
    We just decided to die at age 85... dead broke. Made our planning much easier. Personal decision of course, but if you plan to spend down capital assets, it makes planning easier.
    Our plan is extremely simple... On the spending side, we have three different budgets that we can adjust as circumstances warrant. Best case... Nominal... and Austerity.
    On the Asset/Nest Egg side, We boil our assets down into three categories.
    1. Fixed assets... house, auto, and other valuable non cash items... real property, jewelry, . We do not count household goods... (experience tells us that this is not realistic)
    2. Non Income producing assets... bank accounts, cash, cash value life insurance policies.
    3. Income producing assets... stocks, bonds, annuity.
    All of these items are kept on a spread sheet and periodically updated. It's easy to come up with a total value... and then to average the income from the total...
    To calculate where we stand in our retirement plan, we add
    a. Social security amount.
    b. Amount of interest earned on income producing assets.
    c. ... and add the Total Assets divided by the number of years between now and age 85.
    That establishes how much we can spend, which we then adjust to our best/nominal/austerity budget.
    Sounds funky, but it works,and it takes about 2 minutes to tell if we're on budget or not.
    The second part of this budgeting thing, is that we've been blessed by not having any debt. All of this makes for very simple accounting. One more thing... we don't try to calculate for inflation. In fact, it has not been a problem over the past 20 years.
    #2.
    When we first retired, we thought to use a financial planner, and had him draw up a plan. His calculations had us "short" in capital to the tune of about$200,000... which would tell us we had to work for another 10 years. We spent a month or so agonizing over this, before deciding to give it a try anyway. Best decision ever... We're ahead of his plan too.
    Another time, I hope to get in to some specifics that we've discovered that have allowed us to stay ahead of the game... like starting off with very affordable housing... buying the right cars... older deluxe with low mileage ... food savings, drug price savings... taking advantage of state plans for seniors that few even know about... keeping entertainment costs very low... planning for nursing home... advantages of owning a house, insurance savings, medical and dental and optical savings... tax advantages.
    All in all, I believe that retirement may be more affordable than you may think.
    On "SIMPLIFY"Our own simplification is not in throwing things out... egad... I'm a hoarder, but under control. I keep "Stuff" that I may need for repairs, for replacement... Like all kinds of paint, wood pieces, computer parts, plumbing stuff and like that.
    Our simplification is in our lifestyle. First, our house(s) inside... spartan... easy to clean less to walk around. Outside, very unfancy... perennials... very limited Halloween/Christmas/Seasonal flowers, and other decor.
    The more important simplification part of our lifestyle is in intrapersonal relationships. Having lived in some 22 different houses and locales since our marriage, we realized early on, that "staying in touch" with neighbors and friends was an impossibility, so we don't spend a lot of time with phone calls, emails and things like "get togethers" and Christmas cards. 25 years ago, we came to a mutual agreement with our kids, all boys, not to spend time in each others' lives. We have a great relationship that is always upbeat, and happy. We don't exchange cards or gifts... not because we don't care, but it's just so much simpler.
    I realize that much of what we do is different, and many of our friends don't agree with our laissez faire approach, but it's like "different strokes"... and it works for us.
    In the Winter months, we live in a very active manufactured home, Senior (over 55) Park (Community) of 350 homes in Florida.. There are dozens and dozens of activities going on all the time. The best part of this, is that it provides all of the entertainment we could possibly handle... and yet we can pick and choose, without having to make commitments. Out time is our own... We are free to do what we want, and when we want, and we are extremely protective of that freedom.
    In the early years 1991 through 2002, we still had commitments, like bowling or shuffleboard, and I taught computer classes. We volunteered in short term projects... building fixing repairing and organizing and running major parties for the community... pot lucks, and car caravans to Daytona Beach... and other Florida beaches. Since then, we pick and choose.
    Now... (except for my bride's bridge games) we come and go with the wind... Having a large, heated, community swimming pool and hot tub is great!
    Entertainment is basically free... Even our parties... with endless beer, wine and incredible food... along with great local band entertainment for dancing... cost between $10 and $15/couple... (used to be $4 to $6 couple), but you know... inflation. In the winter, there is a party almost every week. "Economies of scale".
    ..........................................................
    I'm backing up a bit to tell you how we started out in the early days. We had lived in the Chicago Suburbs, Next to Naperville... an upscale town... high prices, taxes, traffic congestion, and one of the highest average (non California) incomes in the nation. We knew we wouldn't afford to stay there... so made our choice... to Really downsize...
    We bought into a campground (the nations largest family campground) where you own your land... but can only live there for a maximum of 185 days/year. We bought a beautiful spot on a small lake. It's a "Park Model"... (look that up, if you don't know what it means) it's just a permanent type camper, similar to a standard manufactured home, but just 12 feet wide and 34 feet long. (400 square feet)... add a 400 sq foot add a room and a 400 sq. ft deck...
    Now here's where the savings come in... even today, you can buy a used unit similar to mine for as little as $15 to $20 thousand dollars, including the land. (We paid somewhat more, because of the lake setting). The really nice part is the cost of staying there... Campground annual dues $1100... including use of all facilities... um-metered water and sewer. Taxes $500, insurance $500... All inground utilities. Total annual "resort" costs = about $2400.
    "Woodhaven Lakes" Amazing place... quiet as the moon... despite the 6500 sites. 43 miles of roads, 18 miles of wooded trails, two Olympic sized pools, dozens of playgrounds, 10 tennis courts, 16 "comfort stations" (large bathroom/shower buildings)... a very large campground store... 7000 sq ft. ...our own Tru Value Hardware and lumber store, our own gas station, propane station, and a full service bank... A fully gated community with a 24 hr. security staff of 25 -35 people, 7 small lakes, a fishing sporting goods store, two restaurants, a nature center, three craft and meeting centers, two large outdoor pavilions, two senior centers, seven computer "hot spots", canoe rentals, a large sand beach... and a fully staffed activities department... Snow mobile trails, Sledding hills ice rinks (in winter)... and the whole campground is nestled in a climax black oak forest... trees, fields, wetlands and almost every temperate zone animal, bird, and plant. To us it's Shangri-la... it's a working man's park... which means that on any given day less than 10% to 20% of the units are occupied. It's a weekend/week off type of vacation retreat, with perhaps 200 snowbird seniors, who live there for 1/2 the year.
    BTW... all of this in a township with a population of 204 people.The website has more details, with real estate info.It's something to consider for anyone on a limited budget. This type of community (though perhaps not so large)... exists in many other states... The Tip of Texas, and Arizona come to mind, as many of our friends do the 50/50 annual winter/summer move.
    .................................................. ..
    An interesting side note, I think, is that in both our North and South communities, many of our neighbors and friends supplement their income by working for the community, or in doing odd jobs... lawn mowing, lawncare, sewing, home healthcare, carpet cleaning and housekeeping. it's a symbiotic relationship. We also trade services.
    We have since bought a permanent home in a continuous care full service retirement community with single family homes, a 60 apartment house, an assisted living and rehab center, and a full service nursing home and Alzheimer unit. that is another part of our retirement story... to save for another time..

    This was followed by 7 or eight similarly long posts. that filled the in between years.
     
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  2. Tom Young

    Tom Young Member
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    As long as I'm at it, a little bit more about the early years.
    .......................................................................................................
    I'll take a few minutes to go over some of the ways we try to keep expenses under control... This might be a little embarrassing, but what the heck, it's what we do.

    First off, food shopping. We buy most fruits, veggies and things like bread and canned goods at the huge farmer's/flea markets in the area. The rest of the food is purchased at Save-A-Lot, and Aldi's... both of which we have calculated, save us about 30-35% from the "Name" Markets, and about 20% from Walmart. Generics work well for us. We gave up shopping the "Sales"... and don't usually buy the brands that have coupons. Nothing wrong with that... just too much work.

    Next... I call my old golf cart "Salvage 1". On general principles, I hate seeing "good stuff" going into the land fills. On Trash day I always make a "Salvage 1 run"... and pick up TV's computers, bicycles, lawn mowers and lawn tools, and other things that others discard. I rebuild and refurbish, and then give most of the recycled stuff away, keeping what I need. Recently, I picked up a $700 recliner, almost new... from a house where the widow couldn't bear to see her husbands chair in the corner.
    Have done this my entire life... the last time I bought a mower, or power tool was about 35 years ago... It's has gotten to the point when my neighbors give me a list of the things they need. I'm also the source for nuts, bolts and those little things that many spend $$$ to travel to Lowes or Home Depot for. I haven't been to either of those stores for two years.

    Cars... Big savings... I have a 1998 Lincoln Town car that looks new... 98,000 miles, and a 1996 Cadillac SLS that I bought from an estate four years ago for $5,000... 0 to 60 in 6.3 seconds [​IMG]... It had 24,000 miles at the time, and the original tag price was $46,000. Since I do my own maintenance, brakes, tune ups, oil changes etc... our only expense is for gas and tires. I figure the Lincoln is good for 150,000 miles, and the Cadillac... (Now has 67,000 miles) is good for about 125,000 miles. Since that totals more than 100.000 good miles left, and we only travel about 8.000 miles a year, we probably will never get a chance to buy another car. Sad. We love the luxury of a top of the line car, and both cars look brand new.

    Side note on car insurance... we have our house, and both cars with same agency, giving us big time discounts... We also added a $1 million umbrella liability policy for the cars and the house. Net additional cost was just $80 since we were able to drop the liability part of the car policies. We get a $50 policy reduction on each car for taking senior safe drivers course. Both cars have zero deductible and the total cost for insuring two cars ('cuz of the town where the cars are garaged)... is $1500...

    House taxes... When we bought our "big house" as opposed to Woodhaven (campground) and Florida... we received a total of about $1700/yr in in tax breaks because of Homestead exemption and Senior Tax freeze... Fortunately we bought just before a revaluation, in 2004.

    Now here's another point about retirement on a budget. Take a long hard look to see if your state government has any programs for low income seniors. the Operative word here is "income". Illinois has some very substantial benefits for Seniors, that count only "income", and not assets. After telling a friend about this, she investigated her home state and found she was eligible for benefits in excess of $1500... that no one had ever told her about. the Illinois program is called "SeniorCare". Because of budget constraints, the program has been curtailed, but during the years we were in the program, we calculate that it saved us about $7000.

    It took us a while to realize that so many businesses offer Senior discounts. Even "Goodwill Industries" offers this. It's not difficult to ask... we just say... "We're Seniors"...

    Now... some embarrassing things... Since the barber "scalped" me on the day before my wedding, I have never been to a barber... I just learned to cut my own hair... Lets see... at about $10 every three weeks, since 1958... that's about $8500... and I also cut my bride's hair... so that's maybe a total of $15000. Not bad for the $20 investment in the barber kit... (and that's not counting the wait... and the back and forth travel... whooeee!)

    Cheap?... you bet... We buy clothes at the end of the season... never buy unless it's at least 70% off. Another cheap trick... that we found both up north and here in the south... The town next to us in Illinois is an "old money" community. the ladies from 7 churches have joined to form a resale outlet, based on high turnover... Because so many families give... the outlet (open 3 days a week), has an incredible amount of very excellent brand name clothing and other goods... that they sell at extremely low prices. All you can fit into one of those Walmart style wire handled baskets for $4. Suits, shirts, cocktail dresses, jackets... anything... $4. I fit into the basket, 8 sport shirts, two sweaters and a new belt, before we left Illinois, for $4. Tommy Hilfiger, Yves st Laurent... the very best labels, and most probably only worn a few times. These little "Jewel" stores are in many towns... Just have to look... and not worry that your neighbor will know where you bought your "fashions".

    It certainly helps to be able to fix things... the only thing I won't tackle is Air conditioning... We haven't supported the tradesmen at all in the past 30 years... Just two air conditioning repairs... one for a car, the other for the house.

    We spent at lot of time picking out the right place to live... Many things to consider... Am positive that counts... a lot!. The town we lived in (Illinois) before retirement has an average income of $88K... The town we live in now, in IL.... the income is about $43K. More about retirement locations another time.
     
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  3. Tom Young

    Tom Young Member
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    More. :eek:

    When I started posting here, I didn't know how much experience regular members had. This may be a little on the simple side... and my income level may be well below that of others....Anyway...

    Net Worth
    In order to calculate the amount you may need to retire, net worth is the benchmark that is used to determine how long your money may last.

    Net worth is also the most difficult number to tie down... practically, theoretically, statistically and comparatively. Not the number... but the way in which it is used for planning.

    Don't even bother to look for national statistics, unless you're prepared to jump through hoops to determine urban rural, male female, family vs individual or couple, and then to figure at your current age. Mostly a thing for financial planners. FWIW, a generally accepted net worth figure for age 55-64 is $232,000... but that is meaningful only in the context in which it was determined.

    Here's the overly simple way that I see to calculate net worth. (yeah, I know I covered this before, but I'm covering it again.)

    Add the current cash value of all of your belongings. The TRUE value... What you would get if you sold it on the open market, today. That means the $2,000 diamond ring is worth $300... the comic book collection is worth $150, not the $1200 shown in the catalog, and the $23,000 car you bought in 2009 is worth $10,000 today.

    Don't forget to net out your "worth" by subtracting the credit card debt, the auto loan, and the house mortgage. If you have stocks, pick a point in time to calculate their worth... not before the crash.

    Being honest with yourself here is important. (My first attempt at doing this, overstated our net worth by about 35%, and turned the rest of my planning upside down.)

    So why "net worth"? Simply because, that, coupled with any ongoing income is what you'll have to live on in your years of retirement. (Unless of course you incorporate winning a lottery in your plans.)
    .................................................. ......

    So here's how I use net worth... Not the normal planning guide , but my own guide....

    1. Instead of starting from what you need to retire, look at what you'll have to retire on. "Reality based planning"

    2. Calculate how much income you can count on, from fixed sources. Social Security, Guaranteed Pensions, Annuities, Don't try to calculate inflation... either here or in your retirement expenses, later on. If you're planning on investment income from stocks or bonds, use a conservative ROI percentage, not the 8% that your pension fund uses.
    (Note: For planning purposes, don't used income compounding... this is an offset to the inflation factor that you won't be considering.
    Example: (use annual figures for simplicity)
    ..........Social Security... $22K
    ..........Pension........... $10K
    ..........Stock............. $5K
    ..........Pt. Time work..... $8K
    ..........Tot. income....... $45K

    3. Spending down net worth...
    Calculate this, by taking your total net worth (let's say $230K) and dividing this by the number of years between your retirement date,and your currrent life expectency.
    Thus if you retire at 62 and your life expectency is 85, your number is 23 ... 85 -62 = 23
    Now, you can spend down that at $10,000 per year.
    $230 / 23 = 10K

    4. Your simple retirement plan would thus allow you to spend
    $45K + $10K or $55,000 per year.
    .................................................. .

    The obvious... What about inflation? All I can say here, is that somehow, over the past 20 years inflation and income has somehow equalized, probably due to the low CPI... but for simple, basic planning purposes, up until now, this has not affected my own plan.


    At the very least, whether this scenario looks right for you or not, it gives some kind of a base to build on.

    As stated earlier, this would be a best circumstance budget, built from the income expectations.

    You might consider creating a "nominal" budget, by simply not using the sell-down of assets.

    Of course, an austerity budget is built from the ground up... based on minimal expenses.
     
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  4. Joe Riley

    Joe Riley Veteran Member
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    Thanks for sharing your life-experiences in retirement with us, @Tom Young . You have given us a lot to chew on. Have you written anything, lately? When you did work, what kind of work did you do? I hope that you stay with us and that you find a comfortable chair, in the forum!
    [​IMG]
     
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  5. Tom Young

    Tom Young Member
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    I have a reputation of being "wordy"... :(
    ... but ... as a diary outline:
    Born: Pawtucket R.I.
    Schooling thru Bowdoin College degree Psychology
    Married dear jeanie (childhood friend since age 7) after college 1958
    Four sons: oldest now 60 and 61.
    1958-1966 Store Manager Sears
    1966-1984 Dist Mgr, then Terr. Mgr, then Natl. Catalog Sales Prom. Mgr., Montgomery Ward
    Last position Spec. Project Mgr... close down 2400 catalog stores.
    1984-1989 My own business... ala "Fast Signs"
    1989 Business cut short by cancer. Decided to retire.
    Retirement "Woodhaven Lakes", Il, Lake Griffin Harbor, Fl., Liberty Village, Peru, Il

    I still drive my cycle... every day

    Biker Bob1.jpg
     
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    Last edited: Sep 7, 2019
  6. Bess Barber

    Bess Barber Very Well-Known Member
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    images - 2019-09-07T182147.548.jpeg
     
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  7. Tom Young

    Tom Young Member
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    An update...
    More as a check on myself, as I realize no one here comes to the forum to read a book.

    As to the Alzheimer's... It's becoming more of an interruption in life.
    First... it takes longer to do things, like writing here. It even takes a while to find what I've already posted. That, compounded by peripheral hand neuropathy means that what used to take a minute or two to make a short post , now takes five minutes or more. Along with that, it takes a few times of "going back" to see what I just said.

    Next... much less socializing. More staying home and avoiding being out in the world. (in fact... right now, jeanie and I are supposed to be at a weekly social meeting in our CCRC. We used to be there first to greet everyone.)

    Have begun a new project of simplifying life. Attempting to get out of the hoarder instinct, by (initially) moving what we don't regularly use ... out of the house, and into the garage. The second part of this , is to have a "place" for everything. Not as easy as it sounds. The longer term guide is to "draw down" from 1600 s.f. to about 650, or one of our single apartments here in Liberty Village. In the meantime, getting used to using just one car. (we have two.)

    No long trips, though both of us still drive. Stay within about a 2 mile radius. Enough for two markets, and most stores in our small town. 6 to 10 miles/week.
    Sounds awful, right? But actually quite pleasant.

    Physical health for me... so far... probably the best in 15 years, except for the sleep problem (3 hrs/night) . Doctor visit two days ago, with no problems except sleep. jeanie has some more tests, so we're not out of the woods yet.

    Newest project is long term planning... honest and open... Where to next? When? Another sit down with our 4 kids age 50 thru 61, to review our wills and finances. I don't even try to stay on top any more. jeanie does the numbers... I just keep the long term planning up to date... We're safe financially... not rich, but safe.

    I expect that in the coming months, when we're both ready, we'll get an Eldercare Lawyer just to verify our home made wills, and to plan the direct cremations we've both decided upon. (no rush to get there, but planning before emotional vulnerability costs $$$.

    Just read the above, and it must sound awful... Au contraire... Freedom from schedules, money problems, responsibilities. Now, both of us do what we want, when we want. Just bought a brand new Xacto knife set so will try and relive my balsa wood airplane days (age 10). Bought a $18 drone from Amazon, and will wait for my youngest son to come so we can go out and watch it crash.

    One more thing that helps... There are 200+ links on my desktop computer screen. You younger guys wouldn't know about this, but I call it my Bob Hope screen..."Thanks for the Memories". My link to the outer world. :D
     
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  8. Beth Gallagher

    Beth Gallagher Very Well-Known Member
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    I enjoyed the update, Tom.
     
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  9. Bill Boggs

    Bill Boggs Veteran Member
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    Enjoyed your story of a life well done.
     
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  10. Holly Saunders

    Holly Saunders Veteran Member
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    Fantastic.... I'm a similar age to your kids (not intending to make you feel old):p... but some of what you've written about your health is happening to some of us younger ones too, so we can relate a little, and what we're not experiencing in real life we're learning from your posts. Thanks so much Tom, for making the very real effort to write all this..it makes for a very interesting, and enjoyable read!!
     
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  11. Joe Riley

    Joe Riley Veteran Member
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    Hope you and your son enjoy your drone time!;)

    [​IMG]
     
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  12. Lon Tanner

    Lon Tanner Veteran Member
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    You are amazing Tom!! I live in a Assisted Living ALZ/Memory Care Facility and can relate to all your posts.
    Wishing you all the best.
     
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  13. Bess Barber

    Bess Barber Very Well-Known Member
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    @Tom Young You must have a great memory. I have no idea what I've been doing the last 30 years!! :p
     
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