Mine, Yours and Ours: Guidance for Unmarried Couples on Joint Banking Accounts, Co-Signing Loans and Buying a House

Unmarried couples face unique money issues and financial planning opportunities. For example, how do you own your assets?  There’s a shared joy from living together and a temptation to own things “together.” There are going to be expenses – some shared and others where you find yourself saying, “I’m not paying for that!”

Here are three financial planning areas for unmarried couples.

  1. Are we ready to have a joint bank account? Most individuals will find it safer to maintain a “what’s mine is mine and what’s yours is yours” attitude early in the relationship – keep your bank accounts, investments, credit cards and debt separate. Uncertainty and finances create stress in relationships. Until you develop trust, are comfortable in talking about goals and expectations, and work closely as a team, it makes sense to keep financial accounts separate. Even after the relationship blossoms and you’re finishing each other’s sentences, having separate bank accounts can save you from squabbles.

    An important discussion is deciding how to split joint expenses and who pays the bills. Some couples split expenses 50/50. Others pay for things in proportion to their income – I’ll pay A and C and you’ll pay B and D. It becomes a matter of communication and compromise. However, in other cases it may make sense for couples to contribute monies to a joint account to pay certain bills.

    The key advantages about joint accounts are convenience and building trust about your shared finances, spending and saving habits. However, there are disadvantages. There’s a loss of privacy – you both see what the other is spending. Second, your finances could be at risk if one partner is financially irresponsible. If one has debt problems, his or her creditors could go after a joint account regardless of who contributed funds. And third, either party can clean out that account without the other’s permission. You may want to limit the balance of that account to a month or two of expenses.

  1. Thinking twice before co-signing on a loan. This includes co-signing a lease, applying for a joint credit card, or taking out a mortgage as an unmarried couple. It might sound like a good idea to help out your partner with bad credit. However there are many reasons not to co-sign a loan per Bankrate.com. It’s high risk and low reward. The individual with a bad credit score has little to lose and you assume all the risk if the loan isn’t repaid timely. Your ability to get credit when needed may be restricted due to excessive credit. And life happens – what if the other party loses their job or you break up? The banker’s not going to care, and you’ll get a call. There’s a reason why a 200-ton sculpture of black marble at the Bank of America Plaza at 555 California Street in San Francisco is also known as “The Banker’s Heart of Stone.”
  2. Purchasing a house. Weigh your options before making the plunge in three primary areas. First is title of ownership. It might be single ownership simply because one party has more substantial assets; or it can be joint tenancy or tenants in common (TIC). A major distinction upon death – if joint then the other party inherits, and if TIC the decedent’s ownership will pass by his or her will or trust. Second is how you split the costs including down payment, closing costs, utilities, taxes and repairs. If it’s single ownership, why would the other party pay property taxes? In that case, he or she pays “rent.” And finally, negotiate and write down your break–up plan for the house. Who gets to keep the house? And what are the buyout terms?

As young relationships blossom, we hope couples grow together personally and financially. However, life throws curve balls. Plan accordingly. It may be prudent to have written agreements, and get legal advice, especially when the stakes are high.

Good luck.

You can also view this article on Reno Gazette Journal.

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Getting Hitched? Ask These 9 Financial Questions Before Living Together

Millennials experience more stress and don’t manage it well, according to a survey by the American Psychological Association. Compared to other generations, they’re the most stressed, followed by Gen Xers, Boomers and finally, Matures. Over half of millennials report lying awake at night worried during the past month. Primary stress culprits include money and work. At Sage Financial Advisors, debt and planning for the future are some of the most common worries we hear from young adults.

Additionally, millennials dominate the ranks of renters, are less likely to own a home or marry than prior generations at a similar age, according to Pew Research. Young adults aged 25 to 29 cohabitate almost four times the rate of Boomers at a similar age.

This is the second in a series of articles focused on helping young adults have less financial stress and plan a successful path ahead.

Here are questions that young adults should ask before moving in together or marrying:

  1. Discuss reasons for moving in together. The list should be long. The phrase “makes financial sense” should be one of the benefits, not the primary one. Yes, a break up between non-spouses is less legally complicated than a divorce. However, how much more stress do you want and why enter a problem relationship? Separate living arrangements might be preferred.
  2. What are your expectations of each other? How will chores and bills be split? Will it be okay to hang out late with your co-workers? Who will cook and who does the dishes?
  3. Talk about finances. It’s good to know upfront about each other’s current financial condition – prior bankruptcies, significant debt and poor credit scores. Whose name is on the lease? Is the bill pay schedule manageable for both of you? Should you have mine, yours and our bank accounts? Here’s a sample couples money worksheet.
  4. Agree on the address. Does it provide equal commutes? Is it affordable and match your needs?
  5. Prepare for the good, the bad and the ugly. A mentor taught me how to read a contract – if you can live with the “come hell or high water” provisions (consequences of breaching the contract), then it’s probably an okay deal. This includes piled dishes, sleeping in until noon, snoring, and slow pays after the courting days are over. And have a break-up plan in advance.

What about marrying? Add these to the list:

  1. Discuss your money views and saving/spending habits. Money talks are emotional and personal. Openness and transparency take priority. What would you do if given a million dollars? How do you feel about money?
  2. Discuss family plans. More women are waiting longer to be mothers. It’s not unique to millennials – it’s been a trend since 1970 with a shift away from marriage and increasing educational attainment. Delaying parenthood is not due to a lack of interest though. Pew Research says over half of millennials say being a good parent is one of the most important goals in life – higher than having a successful marriage.
  3. Open the financial kimonos. Full disclosure becomes more critical with the legal issues of combining assets, pre-nuptial agreements, wills, trusts and life insurance.
  4. Negotiate priorities. I met an interesting gentleman years ago at a business retreat. He shared his key to marriage: Learn when to negotiate your priorities. For example, if the topic was where to dine that night, he’d ask his wife, “How important is that to you?” On a scale of one to 10, if she said “8” and he ranked it a “3” then she gets to decide. When deciding where to vacation and your destination ranks highly for both of you, then it’s time to sit down, discuss and negotiate. It’s a mindset of working together and compromise.

Remember to treasure your relationships more than your possessions and ask the hard questions before moving in with your significant other.

Good luck!

You can also view this article on Reno Gazette Journal.

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Young Adults – 5 Milestones to Celebrate

Why do young adults risk being the “lost generation” and not being as wealthy as their parents? It’s because those born in the 1980s grew up and entered the workforce during the Great Recession and have not recovered financially like those born in other decades, according to a recent study by the Federal Reserve Bank of St. Louis. The report concludes those born in the 1980s have 34 percent less wealth than previous generations at that same age, and that debt and homeownership may have played important roles.

I’m not here to question the methodology of the survey. Rather I ask two questions: “Are you average?” and “Why not put things in your favor?”

The group of young adults known as Millennials gets a bad rap with references as the Boomerang, Selfie or The Tolerant Generation. But they’re also stereotyped as open-minded and collaborative. And they’re well-educated and have many years ahead of them. We at Sage Financial Advisors are fans of this age 22 to 37 year-old group. They’re our future, our daughters, nephews and grandkids, and our employees. They will soon become America’s largest generation and bypass Boomers by 2019 as the largest living adult generation, according to the U.S. Census Bureau.

This article kicks off the first of a series about financial issues unique to young adults. The purposes are to stimulate conversations and for you to explore financial solutions with your family and trusted advisors. Future articles will provide financial education and share entrepreneurial advice. Topics include:

  • Redefining financial goals
  • Paying off debt vs. maxing out your 401k
  • Hers, his and our bank accounts (and how you own your own stuff)
  • Conversations to have before getting married
  • Financial adjustments for young parents

Good financial health pairs well with other aspects of your life. Yet the path can be long and painful. Don’t forget to celebrate the successes along the way.

Here are five financial milestones young adults should celebrate:

  1. Eliminating debt – Young adults face unique challenges including enjoying today vs. saving for tomorrow. Unfortunately, millennials have an average of $42,000 in debt according to a Northwestern Mutual 2018 study. The biggest form of debt is credit cards, followed by student loans. You can only do two things with a paycheck – save or spend – and debt reduces both. Consider checking out some debt reduction tools and support groups available online – David Ramsey, Mary Hunt’s Everyday Cheapskate Monthly, to name a few.
  2. Emergency funds – These free you from living month-to-month, help during emergencies, and provide peace of mind during major life changes such as relocating due to a job or living independently and confidently after a divorce. A common guideline is to have enough money saved to cover three to six months’ of living expenses. You should also consider parking the funds in a competitive online FDIC money market account.
  3. Your first $100k – Pick a number that’s large enough to stretch you, but not unattainable within a few years. Too high of a goal is like walking to the horizon: (a) you never get there and (b) you’re frustrated, or “retirement” may be too nebulous of a concept – I remember thinking that being 60 sounded old.
  4. Getting paid in stock – Cash pays the bills. Equity feeds the entrepreneurial spirits and can be rewarding. Ask artist David Choe who painted the walls of Facebook with murals in 2005. He was advised to take his $60,000 fee in shares rather than cash. Those options were worth $200 million when Facebook went public at $38 a share in 2012 (now trades around $172). I use the term “stock” loosely – can be shares, options, or even cash in the form of profit-sharing incentives. Begin to think and act like an owner with a focus on growing customer satisfaction.
  5. Making a charitable impact – People do the right thing because it’s the right thing to do. You can be impactful and make this world a better place by giving your time, talent or treasure to a local non-profit.

Remember, “The art is not in making money, but keeping it.” Good luck and remember to celebrate your financial successes.

You can also view this article on Reno Gazette Journal.

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Sage Financial Advisors Webinar: Retirement, New Challenges Facing Young Investors, and Outlooks


“Hazy” yes, but “lazy days of summer” no – It’s been a busy summer. We greatly appreciate playing a role in your lives – keeping you on track, helping you think things through, or just listening. Please join us next Wednesday, Aug. 22nd at 4:30 p.m. PST for our quarterly conference (30 – 45 minutes). We host them to keep you informed and educated, and more importantly, to discuss what’s on your minds.

We’ll cover several areas that may impact your lives and accordingly, may require adjustments in your financial plans:

  • 3 Phases of Retirement – A recap to our 3 part series
  • Challenges Facing Young Adults – Debt free, shifting retirement vs college funding
  • Investment strategy updates
  • What’s on your mind?

And feel free to share this invitation with family and friends. Please RSVP to Kirstin and she’ll send you a link to log on.


We look forward to talking with you soon!

Brian & Kirstin

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Top 5 Favorite Online Financial Tools and Their Limits

financial-worldImagine you’re being shipped to a deserted tropical island. What one item would you take? Now ask a thousand people the same question. We’d face similar conditions but would choose different things. Some would go for survival – drinking water, fire starter, Swiss Army knife, or a first aid kit. Others might go for comfort – sleeping bag, comfy recliner, hair conditioner, a solar lamp or a tube of lipstick. And the creative might take a lifetime supply of Tecaté.

There are many choices in online tools for a game of Financial Survivor including retirement, insurance and tax calculators. Perhaps not the utility of a shiny Leatherman tool, but useful gadgets nonetheless. These tools help you see finances in a unique way and explore different “what ifs” so that you stay on track with financial goals, protect your loved ones and have flexibility and freedom to do the things you love to do. There are tons of tools – you can visit websites such as your favorite financial institution, AARP.org, or Dinkytown.net where you’ll find over 400 calculators for free.

What are your favorite online financial tools that make planning easier? We surveyed our Sage Financial team and here are the top five calculators:

  • Budget
    You’ve got to be more serious than anyone on the planet about your finances. Spending plans are important for several important reasons – living on less than you make, knowing where your money goes, and funding emergency reserves (rainy day fund). Online tools range from Excel spreadsheets to those with supporting processes and forums (communities) such as YouNeedABudget.com, Dave Ramsey and others.
  • Loan Amortization
    Financial priorities often shift in time. Often, the early goals are to accumulate emergency reserves and pay off debt. It’s a joy to watch a person or couple see what it takes to get out of debt (payoff accounts with smallest balances first then move to the next, refinance to lower rates, making extra payments to the mortgage, etc.). And lower rates are the payoff of building and protecting your credit rating.
  • Social Security
    How much do you have to save for a comfortable retirement? What is your projected social security retirement? When do you take social security benefits – age 62, full retirement age or 70? Are your earnings being accurately reported to social security? The maximum monthly social security benefit in 2018 is about $3,698 whether you’re 62 or 70. It’s designed to replace about 40 percent of a retiree’s pre-tax income. The more you make, the lower the percentage of income social security will replace. Your monthly benefit is figured around something called “bend points.” Example – if you were born in 1954 or later, you’d be credited about  90 percent of average monthly income to $895, 32 percent between $895 and $5,397, and 15 percent for the excess; add them all up for the retirement benefit payable at full retirement age. Log on to ssa.gov and sign up.
  • BankRate.com
    Bank Rate is rich with interest rate information for both savers and borrowers. It includes regional and global market data including major indices, CD and loan rates. And it’s a good resource to shop for online money markets to check out competitive yielding alternatives for cash reserves.
  • Tax Tables
    Most people hate getting surprises including unexpected tax bills and underpayment penalties. Ask your CPA or enrolled agent for 2018 tax estimates or go online for tax tables. There are significant tax law changes and your situation may have changed – new job, major asset sale, family change, and others.

What about how much do I need to save so I don’t run out of money in retirement calculators? Absolutely retirement calculators are important for planning. Prudently used, they can help us by showing us the probable future impacts of decisions we make today. There are numerous online tools including some of the websites previously mentioned, your 401k plan provider and others. However, they vary from simple (a couple of variables) to complex (numerous variables), and a very user-friendly (simple) calculator might be a poor simulator of reality.

3 Reasons Retirement Calculators Don’t Work

  1. Generally, retirement calculators attempt to answer a very basic question, “We have savings of $X…will it last our lifetimes if we spend $Y per year?” However, life is seldom a straight line and periodically surprises us. What if we don’t live the same number of years (or live longer than expected) – how do we protect the survivor (or hedge our bets)? Our spending in retirement will vary – higher in the early years, stabilize in the middle, then kick up in our later years – how do we plan for that? We’re a blended family – we’ve got my wealth, his wealth and our wealth – how do we factor that and keep peace in the family? We’re planning to resize our home once, maybe twice as we move to be closer to the grandkids – how does that impact our future?
  2. Can’t maintain our desired lifestyle – This rhymes with haven’t saved enough. What is feasible with a financial reboot? Work longer? Spend less? How do you re-prioritize the goals? How do you negotiate a re-alignment?
  3. We (I) don’t want to do this alone – Sometimes it’s a confidence thing (moving outside the 401k cocoon) and other times it may be complexity or you’d rather be doing other things in life. This is where delegation, partnering or simply having a feedback mechanism to help you think things through is needed.

In closing, some projects are completely do it yourself, and others are where you use tools to validate what’s being recommended to you or confirm your thinking. Remember, they’re tools, and sometimes you need a special touch. Imagine three people standing in line at Home Depot. We’ve each got an orange bucket containing the same tools – the same brushes and paint. It’s you, me and a guy named Michelangelo. One of us will have a very special outcome.

Good luck!

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The Third Phase of Retirement: Reflection

Traditional discussions about retirement planning often involve two objectives – accumulating enough money to last a lifetime, then having a way to pass it on to your loved ones. However, there’s a big chunk between retiring and dying where you’re navigating life’s transitions. This three-decade period has been the focus of this series. There are three phases of retirement. Each is defined more by distinct situations, needs and financial needs, than by time. And each has unique planning opportunities and challenges.

The third phase known as Reflection isn’t as fun or active as the first two – Honeymoon and New Directions – because you’re making the more difficult medical and lifestyle decisions. There are two sub-components – the longevity phase (accepting the inevitability of aging) and the solo phase (where a couple becomes single).

  • Primary retiree concerns – It’s often a time of reflection – a life well lived, and uncertainty – how our exit will go. Life has slowed and you’re spending more time at home preserving memories and talking with family and old friends. Health and finances may limit your choices in life. Doctor visits rise as physical and cognitive conditions decline. Caregiving increases as a receiver or giver – one in four American families provide nearly 21 hours per week for care to a loved one. You don’t want to be a burden and focus is getting loose ends wrapped up for less mess left for the kids; and there’s a renewed concern – will my spouse be ok without me? Simultaneously, the kids are worried if mom and dad are going to be ok and what changes they may need to make.
  • Cash flow planning – Three challenging situations require management – Declining revenue and assets, and rising costs. A couple’s income might decrease after a death from reduced pensions and Social Security. Costs rise for healthcare and professional caregivers. Fidelity Investments estimates healthcare costs for a couple age 65 to be $280,000 (excludes long-term care) and inflation. And living alone at home might be cost prohibitive if professional aids are needed – 24/7 care at $20 per hour is $14,400 a month and excludes the cost of Boost drinks and personal care goods. The most expensive period for a couple may be when the first spouse moves to assisted living – you’re maintaining two households. Finances are easier when the second spouse needs advanced care – you sell the house.
  • Legal and estate planning – Your professional advisory team and estate plan should be in place due to the higher risks of diminished capacity and health. And estate plans should be updated at a minimum for any of the “5 D’s” – decade, divorce, death, diagnosis and decline (American Bar Association).

How’d you do in Mind Reading class? Getting your wishes in writing will greatly help your loved ones. Conversation Project was a survey that included end of life planning. Over 80 percent said it was important to have their wishes written down, but only a quarter had done so.

Many tools are available including advanced medical directives, POLST, Power of Attorney for Healthcare, etc. through your attorney, healthcare professionals and online. However, I will highlight a couple to stimulate deeper thought.

  • “Five Wishes” helps remove the guesswork. You express how you want to be cared for at end of life. The five areas include who you want to make decisions for you when you cannot, types of medical treatment you want (or not), your desired level of comfort, how you want people to treat you, and what you want your loved ones to know.
  • Check out Susan Turnbull’s website on ethical wills and letters to trustees. The legacy you leave goes beyond material wealth – your personal stories, wisdom, feelings and advice are worthy of being passed on. The practice of communicating what one thinks is important to younger generations dates back to the first parents. Jewish men began to formalize this practice in the 12th century by writing personal treatises to their sons on how to live an ethical life. And Susan’s modernized it into “love letters” to family members, letters of wishes to trustees and expressions of donor intent.

I end with a story about a beloved comedy team, Burns and Allen. The duo’s career started in vaudeville theater and spanned four decades including theater, radio, TV and film. Burns signature sign-off to their popular TV show was “Say goodnight, Gracie.” Gracie said her final “Goodnight” in 1964 when she died from a heart attack at age 69. But with his trademark cigar, George continued his career as a comedian, actor and singer for a total of seven decades. He’d visit his beloved Gracie’s grave once a month to share what was going on in his life. His onstage characters and jokes reflected his attitudes about life and often poked fun at aging. One of them was “How can I die? I’m booked.” George Burns died at age 100 in 1996.

Good luck to you!

You can also view this article on Reno Gazette Journal.

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The Second Phase of Retirement: New Directions

The average American spends four decades dreaming and saving for retirement. Some transition well. Others struggle. Advertisers portray retirement as a life of leisure – endless walks on the beach and rounds of golf. But as Mitch Anthony wrote in “New Retirementality,” playing golf every day risks two things – first you get bored, and second, you become boring. Retirement is supposed to be fun and a time of rejuvenation. But according to a survey by USA Today, about two-thirds of retirees said they had challenges adjusting to retirement.

Rather thinking about planning for retirement, think the phases you are likely to navigate and negotiate. The three phases of retirement are Honeymoon, New Directions and Reflections. Each phase is defined more by distinct situations, needs and spending rates, than by time. And each has unique financial planning issues. This article is intended to give you some ideas as we focus on the middle phase.

New Directions phase (age 75 – 84) is a pause from the go-go of the prior Honeymoon phase. That period may have been fun and busy. But now, many shift and re-think what they want from their lives while they’re still able. They include simpler things in life, finding new identities (being productive), or new relationships (circles and groups). Think about these two insights by MIT AgeLab. First, we will see a depletion of resources during retirement – financial, cognitive, physical and social – and hopefully gradual and not abrupt. We press on the gas but want to make sure there’s enough in the tank to finish the trip. And second, a 60-year old routine is broken – get dressed, eat breakfast, go to school or work, come home, eat, and go to bed. A new routine is needed.

  • Primary retiree concerns: “Shall I stay or shall I go?” Conversations arise about downsizing or moving closer to the children, someplace warmer, or nearby healthcare. Concerns emerge about longevity and mortality. These include finding yourself suddenly alone (loss of a spouse), caregiving (giving or receiving end), and giving up the car keys (mobility and independence). Do you remarry? Some make new relationships but keep things separate (finances, homes, etc.). According to Pew Research, about half of those 65 or older remarry. Yet another interesting finding from the Office of National Statistics is that women 65 or older are four times less likely to remarry than their male counterparts perhaps supporting the notion that women mourn and men replace.
  • Cash flow planning: The rate of spending tends to decrease as retirees settle and get into a groove. Some planners refer to this as a “retirement smile” effect where retirees spend more in early retirement, flatten in the middle, then rise with healthcare costs. However, spending priorities shift (you travel less but buy airline tickets for the kids to visit you, or rising home or rental maintenance costs as you hire more help).
  • Investment strategies: Is cash flow keeping pace with living costs? The drive for simplicity continues – fewer cats to herd – consolidating, hiring property managers, etc. And interestingly, I see less concern with market events or crisis du jour. I remember a quote by Warren Buffett’s business partner Charlie Monger a couple years ago, “The older I get, the less concerned I am with the state of US economy.” He’s now 94 years young.
  • Estate plan: Review and update wills, trust, POAs and beneficiary designations. How about a professional trustee in lieu of one of your kids to help maintain harmony in the family, or you need special talent? Have you identified new causes or organizations that are ideal for legacy gifting?

Da Vinci, Edison and Ford are known for their innovations that changed the world.  However, there’s also the Museum of Failures in Helsingborg Sweden with examples like the hydrogen blimp, Concorde jet and Segway. Prior miscues serve the wise as lessons learned. Hopefully, these insights give you some ideas ponder and nudge you to action. Forget the rearview mirror. The future is closer than you think.

Good luck!

You can also view this article on Reno Gazette Journal.

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The First Phase of Retirement: Honeymoon

Orson Welles once said, “If you want a happy ending, that depends of course, on where you stop your story.” Some people when planning for retirement focus only on “The Number” – how much I need in monthly income or cash in the bank to retire and stay retired.  Suppose you retire at 65 expecting to live another three decades, but you die unexpectedly at age 74. You didn’t live long enough to run out of money. Was that a successful retirement or in Mr. Welle’s terms a “happy ending?”

More successful retirees value the role of life planning – living life on their terms, how they want to be remembered, and maintaining harmony in the family. This article is the first of a series that will explore each of retirement’s distinct three phases – Honeymoon, New Directions and Reflections. Each phase is defined more by distinct situations, needs and spending rates, than by time. And each has unique financial planning issues.

The first phase, Honeymoon (roughly age 65 to 74) is a period of discovery and very active physically, emotionally and financially. These are the “doing years” when you’re checking off the to-do list of “someday” items. These include travel, spending time with family, reviving an old or starting a new hobby, completing a home improvement project, and changing careers including part-time, board or committee member, and volunteering.  It’s emotionally charged – you’ve retired – and you may have retirement regrets because once you get off the horse, it’s hard to get back on. This and the third phase (Reflections) are generally the most expensive.

  • Primary retiree concerns: Are we spending too much (or too little)? Now, what am I going to do (or “Please find him something to do. I didn’t marry him to have lunch with every day.”). How do we invest our retirement funds, and draw a monthly paycheck from them? And watching CNBC daily is likely to give you grief.
  • Cash flow planning: You will be more serious about your finances than anyone else on the planet. Budgets are crucial – some are very detailed and others know they spend X dollars a month. They’ll have “spikes” for travel, remodel, RV, etc. You’ll file retirement benefit elections for Social Security, elect IRA/401k withdrawals and organize your other investment cash flow including rental properties.
  • Investment strategies: Are your portfolios positioned for the long-term and your “happy ending?” Sufficient liquidity to maintain your retirement checks should a bear market descend?
  • Business exit transition: What exit best accomplishes your goals regarding your financial security, tax minimization, employees and clients?
  • Risk management: What employer-provided coverage needs to be replaced? File for Medicare at 65 and what supplemental insurance should you consider? Put your auto, fire and casualty coverage out for bid? If lots of overseas travel, do you buy travel and medical insurance?
  • Estate plan: Consult your attorney and review and update your wills, trust and POAs and beneficiary designations. Should you consider renaming successor Trustees or Executor because they’re as old as you or moved? How about a professional trustee in lieu of your eldest kid as successor trustee to help keep the peace and get things done? What about modifying “ownership” of accounts (are they supposed to be protected under the trust, add a joint owner, etc.)?

This is a pretty large list! I didn’t bring my briefcase on my honeymoon with my bride and I don’t expect all of this get done in the first year of retirement honeymoon. However, that’s a reason you have a team of trusted advisors to delegate some of this work. Life has a way of surprising us and we can blow through the three retirement phases faster than expected.

Good luck!

You can also view this article on Reno Gazette Journal.

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What worries the world? Here’s what one survey says

What are your top three worries? Do they serve as anchors and impede your progress? Or do you acknowledge that the world’s an uncertain place, you plan accordingly and live your life? Football coach George Allen, Sr. once said “Forget the past – the future will give you plenty to worry about.” This article takes a look at a recent global survey of the world’s worry list and shares some insights that you can discuss with your family and team of advisors to help you stay on track and manage whatever crisis du jour next develops.

What worries the world is the name of a monthly survey conducted by a leading global market research and advisory French firm called Ipsos.  One question asked is “Which 3 of the following topics do you find most worrying in your country?”  Here are the results from the survey (250,309 adults in 29 countries interviewed January – December 2017).

Worry          % Mentioning      in 2017 Top Worries by Country
Unemployment/jobs 36% Italy & Spain 65%, France 46%, Saudi 45%, S. Korea 32%
Corruption & financial/political scandals 34% S Africa 67%, Brazil 57%, India 47%
Poverty/social inequality 33% Russia 54%, Germany 45%, Japan 38%
Crime and violence 29% Peru 65%, Mexico 59%, Argentina 51%, Sweden 46%
Healthcare 23% Hungary 65%, Poland 49%, UK 41%, US & Canada 37%
Terrorism 20% Turkey 62%, Israel 45%, Belgium 34%
Education 19%
Taxes 17%
Moral Decline 15%
Immigration Control 13%
Inflation 10%
Rise of extremism 10%
Maintaining Social Programs 9%
Climate Change 9%
Childhood Obesity 3%
Access to Credit 2%

It illustrates what people worry about, and country-specific issues. Some of these worries are big pictures issues for which we have little control. Other worries, however, are very relevant and actionable so you can better put things in your favor. These “worries” have personal financial planning implications.

  1. Safety and security are top concerns whether it is my job (income interruptus), personal safety, or integrity of the system. How can I increase my marketability (earnings potential)? What risk management tools should I use to protect me and my family?
  2. What is important to you about some of these single word “worries?” Healthcare can mean the process and issues of aging, the access to or cost of care, or maintaining good health. Is education about investing in one’s future, how to fund for it, or paying off the debt from getting your diploma? And what steps can you take to get a bigger income tax refund, minimize the tax from selling your business or a property you’ve had for a long time, or reducing the cost of gifting your wealth or transferring it upon death?
  3. We live in a changing and uncertain world. There’s a trade-off between risk and return. How much return do you need and can it be earned with a comfortable level of risk? Should you take advantage of opportunities overseas by investing globally? What areas or regions represent danger or greater volatility? Diversification is the blessing of never getting killed in exchange for never making a killing.

A wise person once told me if you wait for all uncertainty to disappear, then so does the opportunity. And often, the initial question or “worry” isn’t the real issue – you’ve got to dig, ask and explore. Then you get a clearer picture, the solution might be a bit more involved, however, it’s best for you. Good luck.

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Planning Under the Clouds of Dementia and Reducing Financial Elder Abuse

“It’s not the men in your life that matters, it’s the life in your men.” Mae West had a way with words and exuded a playfulness in life. The legendary actress and playwright delighted audiences and horrified guardians of morals with her hourglass figure wrapped with feathers and furs and husky voice that purred double entendres. She said, “If I had known I was going to live this long, I would have taken better care of myself.”  Paradoxically, she lived a more disciplined life, she didn’t smoke or drink, and died at 87 in her LA home.

Living longer challenges our basic wants of freedom, dignity, health and not being a burden. We need more wealth, experience and negotiate the process of aging, strive to reduce the high cost of elder financial abuse. This article outlines some actionable steps to help you prepare and protect your future and that of your loved ones.

The costs of living longer are financial and emotional. When are you ready to retire, enjoy a life of leisure and hang up your tool bag, briefcase or lab coat? The decision for some is easy. Others struggle because it can be a big transition mentally and emotionally. Do you have enough wealth, or on track, to last a lifetime? If your lifestyle requires $100,000 a year over and above your pension and Social Security benefit, and you retire at 65, you’d need about $1.6 million in wealth if you expect to live for 20 more years, assuming 5% return and 3% inflation. If you live 30 years, you need $2.2 million, and $2.7 million for 40 years. Serious saving and prudent investing is required. And as we grow older, emotional challenges shift to making life simple (less lawn), using alternative transportation (lunch with friends), and the assistance of caregivers (changing light bulbs).

As we get older and capacity diminishes, the risks rise for elder financial abuse.  And the costs go beyond money lost. According to figures reported by ElderProtectionCenter.com, elder abuse costs US seniors about $36.5 billion annually, one in five seniors report being a victim of financial fraud or abuse, and nine of ten abusers are family members or other trusted individuals. This abuse can lead to distress and depression. And despite being widespread, the crimes often go unreported or undetected.

Dementia is a general term for a decline in mental ability severe enough to interfere with daily life. Alzheimer’s accounts for about 80% of the cases, and afflicts one in nine Americans age 65 and older and one in three age 85 and older per the Alzheimer’s Association. Another type of dementia is Parkinson’s. And here are three stages of decline and planning steps to consider.

Mild decline – Time for difficult conversations with he or she, the family and professional advisors. Discussions include financial, legal and caregiving plans, and for the afflicted about his or her wishes with loved ones for future care. Planning steps include reviewing estate plans and beneficiary designations, and executing durable powers for finances, power of attorney for health care and living will.

Moderate decline – Time to deepen the working relationships between family and professionals. Financial planning should be wrapped up because legal capacity may be in question.

Severe decline – This is when the family is working primarily with professionals. Legal capacity might be lost, and proper planning helps continuity amongst the family – otherwise guardianship may be necessary.

May West also said, “You only live once, but if you do it right, once is enough.” Amen to that.  Life has its ups and downs. It’s the rough spots that give us the most grief, and why we plan. Paraphrasing the words of Denis Waitley, we expect the best, plan for the worst and are prepared to be surprised. Good luck to you.

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