Friends Talk Money: Recent Episodes
Pam Krueger
Whatever life after 50 looks like to you, thinking about money in retirement shouldn’t keep you up at night. We’re all dealing with the big questions about money and aging: How much you can really spend, how to invest your life savings without risking it all in the stock market, and should you sell your home and downsize? Then there’s the biggest unknown: how much health care you’ll need, and whether your savings and insurance is enough to cover the costs. This is personal. These topics may not be easy to talk about with your own family. That’s why nationally known personal finance experts Terry Savage, Richard Eisenberg, and Pam Krueger and are here to open up the dialogue so you can learn how to define your retirement and deal with your money on your own terms.
These three friends think, write, and speak about these issues. And now they’re joining forces to give you the benefit of their experience, wisdom and advice in their new podcast, Friends Talk Money.
Each week Richard, Pam and Terry will discuss a different piece of the retirement pie. Everything from Social Security and Medicare to investing and cash flow management is on the table, with practical, common-sense advice on how to deal with these and other challenges.
But don’t expect cut-and-dried answers. These friends have strong opinions, and aren’t afraid to debate the pros and cons of their friends’ recommendations. But what you will walk away after each episode is a greater awareness of the retirement planning issues you’ll need to address with the help of your family, friends and financial advisor.
Social Security is back in the headlines, with warnings that the trust fund could become insolvent as early as 2032. Does that mean your benefits are at risk? Should you claim early? Economist Larry Kotlikoff joins us to separate fact from fear. We explain what "insolvency" really means, why the long-term funding gap may be much larger than most people realize, what Congress could do to fix it, and—most importantly—what today's headlines should (and shouldn't) mean for your own retirement decisions. Links: * MaximizeMySocialSecurity.com * Maxifi.com * Economics Matters by Laurence Kotlikoff (Substack) * Get What's Yours: The Secrets to Maxing Out Your Social Security (Larry Kotlikoff) * Social Security Horror Stories: Protect Yourself from the System — and Avoid Clawbacks (Larry Kotlikoff and Terry Savage) * Social Security Insolvency (Terry Savage) * How to work in retirement without seeing your Social Security checks slashed (Richard Eisenberg) * Social Security: Make smarter decisions to maximize your lifetime benefits (Wealthramp) * A Summary of the 2026 Annual Reports
Retirement confidence has hit its lowest point since post-COVID — and for good reason. From skyrocketing Medicare premiums to housing costs, Social Security uncertainty, growing debt, and the crushing weight of caregiving, retirees are facing a financial storm no one fully planned for.
In this episode, Terry, Richard, and Pam break down the top 5 worries from the brand-new 2026 Retirement Confidence Survey (Employee Benefit Research Institute) and, more importantly, what you can actually do about them.
What we cover: * Why 40% of retirees say expenses are higher than expected * The shocking truth about Medicare costs in 2026 (Plan G premiums up 40%!) * How housing — even if you downsize — can blow up your retirement budget * Social Security: what the 2033 trust fund depletion really means for YOU * The debt crisis is quietly growing among retirees (39% are affected) * Why 74% of workers plan to work in retirement — but only 31% actually do * Caregiving: the retirement wildcard nobody budgets for
Links:
- EBRI 2026 Retirement Confidence Survey
- These are the top 5 things retirees are worried about right now (Richard Eisenberg)
- IRMAA Increases Medicare Premiums (Terry Savage)
- Inflation Isn't the Real Problem: Having No Plan to Account for It Is (Pam Krueger)
- National Foundation for Credit Counseling
Nearly 3 in 4 couples say money is a source of tension in their relationship. But most never figure out why, or what to do about it.
In this episode of Friends Talk Money, Richard, Pam, and Terry talk with Heather and Doug Bonaparte, a married couple and co-authors of the book Money Together. Heather is a business and legal affairs attorney. Doug is a certified financial planner and founder of Bonafide Wealth. And together, they have had every hard money conversation you have been putting off.
If you are married, partnered, or thinking about combining finances with someone, this conversation will change the way you think about money together.
They cover:
- Why debt and shame are silently running your relationship
- How financial power really works between partners
- Joint accounts vs. separate accounts, what actually works
- Navigating money in second marriages
- What to do when you and your spouse have different risk tolerances
- Why every couple needs a "Sorry I'm Dead" letter
Tax season just got a major overhaul. The One Big Beautiful Bill changed more tax rules than anything since 2017, and if you're over 65, retired, or earning tip or overtime income, you could be leaving serious money on the table.
In this episode of Friends Talk Money, we sit down with Lisa Green-Lewis, TurboTax spokesperson and trusted tax expert, to break down every major change you need to know before you file.
- The NEW $6,000 deduction for seniors and who qualifies
- Tips & overtime income deductions - brand new for 2025
- Auto loan interest deduction - what cars qualify
- Social Security & taxes - the surprise that shocks retirees
- RMDs, Roth conversions & how to avoid a massive tax bill
- IRS audits - should you be worried? Free filing options and how to get help
Whether you use TurboTax, work with an accountant, or file on your own - this episode could save you thousands. Don't miss it. * TurboTax Free Filing: https://www.turbotax.com * AARP Free Tax Help: https://www.aarpfoundation.org/taxhelp
Description: Becoming a financial caregiver for an aging parent can happen overnight. And even financially savvy families can find themselves unprepared. In this episode of Friends Talk Money, we talk with Beth Pinsker, author of My Mother's Money and personal finance writer at MarketWatch. Beth shares what she learned while managing her mother's finances during a long medical crisis, including: • Why a durable power of attorney is critical • The mistakes people make with Medicare • How long-term care insurance really works • IRS issues after a parent dies • Estate planning gaps that cause family conflict • What every adult child should do now This is a practical and emotional conversation about money, aging, and protecting the people you love. If you have aging parents or want to make things easier for your own children one day, this episode is essential. Links:
- My Mother's Money By Beth Pinsker (Amazon)
- Terry Savage Personal Financial Organizer (Terry Savage)
- Estate Planning Search (Search Attorneys)
The Dow is hovering near 50,000. AI stocks are dominating the market. And investors are feeling both confident and anxious at the same time.
It's the first Friends Talk Money episode of 2026, and we're joined by expert market strategist Jim Stack, founder of InvestTech Research, to unpack what's really happening beneath the surface of today's stock market and what it means for investors nearing or in retirement.
Jim explains why extreme market valuations don't cause bear markets, but dramatically increase the risk. He also breaks down why indexing may no longer feel as diversified as investors think, how the "K-shaped economy" is being driven by paper wealth, and why capital preservation matters more than chasing upside late in a bull market.
In this episode, we cover:
- Why today's market feels eerily similar to past bubbles
- The real danger of AI stock mania (and what history tells us)
- How a 50% loss can delay retirement by years
- Jim Stack's "Ulcer Index" and the true cost of bear markets
- Why Warren Buffett is sitting on hundreds of billions in cash
- Defensive portfolio strategies for investors 50+
- Index fund concentration risk most investors overlook
- Housing, interest rates, and what retirees should consider next
Jim has successfully helped investors navigate market downturns for over 40 years, including the 1987 crash, the dot-com bust, and the 2008 financial crisis. His message is clear: this isn't about market timing, it's about risk management.
AI is now answering millions of financial questions every day, but how much of it can you actually trust? In this episode of Friends Talk Money, Pam Krueger, Terry Savage, and Richard Eisenberg dive deep into the surge of AI-generated financial advice and unpack the risks, myths, and surprising mistakes that tools like ChatGPT, Claude, Gemini, and DeepSeek are making. A major study shows AI gives incorrect financial answers up to 35% of the time, and the consequences can be huge when it comes to Social Security, Medicare, retirement timelines, investing, or even basic budgeting. To separate hype from reality, we're joined by special guest Jason Lilly, a highly respected Wealthramp-network fee-only advisor, CFA, CFP®, and founder of Tenere Wealth Advisors. Jason shares exactly how he integrates AI responsibly in his practice: what it's great for, where it falls apart, and why human judgment still matters more than ever. You'll learn: * Why AI sounds confident even when it's wrong * What AI can actually do well in financial planning (and what it can't) * Why budgeting, Medicare decisions, and Social Security claiming can be dangerous when left to AI * Hidden errors of omission most chatbots make * How advisors like Jason use AI to communicate better, analyze data faster, and stay human-centered * Why AI will never replace real fiduciary advisors (and how to spot one who's overly reliant on it)
Whether you're already using AI for your finances or just curious, this episode will change how you think about these tools. Links: * 'Well-Recognized Issues': ChatGPT Gave Wrong or Misleading Answers to 35% of Financial Questions Asked in a New Test (MSN) * Should you trust AI for Medicare, Social Security for long-term-care advice? (MarketWatch) * How AI Is Revolutionizing Long-Term Care Planning (Friends Talk Money) * What will happen to Social Security once AI kicks in? (Terry Savage) * Tenere Wealth Advisors
Gen X is officially in the retirement danger zone — and many are worried about outliving their savings. In this episode of Friends Talk Money, Richard Eisenberg, Terry Savage, and I sit down with author and workplace/retirement expert Kerry Hannon to dig into the findings from her new book, Retirement Bites: A Gen X Guide to Securing Your Financial Future.
We explore:
- Why more than half of Gen X fears they won't be financially ready
- How DIY retirement planning, disappearing pensions & late savings habits created a perfect storm
- The crushing impact of student loans, credit card debt & supporting both kids and aging parents
- Why so few Gen Xers work with a financial advisor — and how to find the right kind of help
- The truth about Social Security's future for Gen X
- Health costs, layoffs, age discrimination — and how to stay employable into your 50s and 60s
- The new definition of "retirement" and why working longer can be a superpower
- Plus: What Gen Xers can control right now to course-correct
Kerry also breaks down the huge differences between older Gen Xers nearing 60 and younger Gen Xers in their late 40s, including who may benefit from the next major wealth transfer.Whether you're a lifelong DIY investor or navigating retirement planning for the first time, this episode is a must-listen for the most overlooked generation in personal finance.
Links:
- Retirement Bites: A Gen X Guide to Securing Your Financial Future (Amazon)
- Reality Bites: Gen X is Nearing Retirement and More than Half Don't Believe They'll be Financially Ready When the Time Comes (Northwestern Mutual)
- Portfolio Perspectives: Gen X Isn't Ready for Retirement – How Financial Advisors Can Help and Harness SECURE 2.0 (Dynamic Advisor Solutions)
- Gen X Nearing Retirement With Worries About Limited Savings, Allianz Life Study Finds (Allianz)
- Gen X's Retirement Shock: The Truth About Healthcare Costs (Friends Talk Money)
Three-quarters of Medicare beneficiaries say choosing a Medicare plan is confusing, and nearly 7 in 10 (69%) Medicare beneficiaries have not compared their own source of Medicare coverage with other Medicare options offered in their area during past open enrollment periods, according to surveys. These actions can cost you money and limit your medication coverage and pharmacy access.
In this episode of Friends Talk Money, we unpack what you need to know about Open Enrollment and your plan options, diving into the pros and cons of Original Medicare plus a supplement and Part D plan versus Medicare Advantage. We explain what's different this year, including the inconsistency around premiums and the discontinuation of Anthem standalone Part D plans.
Our special guest is Diane Omdahl, a nationally recognized expert in Medicare. She's the creator of 65incorporated.com, which guides seniors in their Medicare choices, and author of the bestselling book, Medicare For You. She joins us to explain what steps you can take now to ensure your coverage is fully meeting your medical needs and isn't costing you more than you need to spend in 2026.
- Medicare Beware! A Special Report (Terry Savage)
- Survey: 75% of Medicare Beneficiaries Say Selecting a Plan Is Confusing
- Nearly 7 in 10 Medicare Beneficiaries Did Not Compare Plans During Medicare's Open Enrollment Period
Nearly 1 in 4 Americans over 50 are planning a job change this year, according to a new AARP survey—but here’s the surprising part: 65% haven’t taken any steps to prepare.In this episode of Friends Talk Money, hosts Terry, Richard, and Pam dig into what’s really driving career changes for people over 50, 55, and 60—and what older job seekers need to know to stay competitive in today’s market.
We cover:
- Why boomers and Gen Xers are rethinking retirement and launching second-act careers
- How to avoid the black hole of job applications and get results through networking and research
- Smart strategies for updating your resume and LinkedIn profile after decades in the workforce
- Using AI tools like ChatGPT (carefully) to improve your job search
- How to prepare for Zoom interviews and make a strong impression
- The realities of ageism in hiring—and how to position your experience as a strength
- Negotiating job offers: when to push, when to say yes, and how to show employers you solve their problems
Whether you’re worried about layoffs, craving more flexibility, or simply ready for a new challenge, this episode is packed with practical job search tips for older workers who want to thrive in today’s shifting economy.
Links: Certified Age Friendly Employer Program (Age-Friendly Institute) Employer Pledge Program (AARP) Retirementjobs.com Layoffs This Year Reach Highest Levels Since Pandemic, According to One Measure (Yahoo Finance) Survey Shows a Sharp Increase in the Number of Older Americans Seeking a Job Change (AARP) Best Ways to Prepare for a Job Search After 50 (Next Avenue)
Generation X is often called the “forgotten middle child” between Boomers and Millennials, but with 65 million Gen Xers moving into their 50s and early 60s, they’re facing a massive financial challenge: skyrocketing healthcare costs.
In this episode of Friends Talk Money, Pam Krueger, Terry Savage, and Richard Eisenberg unpack why healthcare, not retirement savings, is now the #1 financial concern for Gen X. From high insurance premiums and long-term care to hidden out-of-pocket costs, we break down:
- Why Gen X is more worried about healthcare than retirement savings
- How rising costs are squeezing families still raising kids & saving for retirement
- What Medicare will and won’t cover
- Smart planning tools: HSAs, catch-up contributions & employer health benefits
- Why fee-only fiduciary advisors can help Gen Xers plan ahead and avoid surprises
If you’re Gen X (or love someone who is), this is a must-listen to help prepare for a healthier, more financially secure retirement.
Links:
- This is Generation X’s biggest retirement worry — and it’s not money (MarketWatch)
- Gen X Is Headed for Retirement Crisis: 5 Ways To Avoid Being Part of the Trend (GoBankingRates)
- Three Things You Should Do – And Not Do – To Prepare For Your Retirement (Wealthramp)
- Health Savings Account (Terry Savage)
- Want to Retire at 67? See if You Can Answer These Five Questions (Kiplinger)
More Americans in their 50s, 60s, and beyond are starting businesses than ever before—but they’re also facing new, mounting challenges. In this episode of Friends Talk Money, we unpack what’s fueling this surge in encore entrepreneurship and how recent policy shifts—especially cuts to the Small Business Administration (SBA) and new trade barriers—are making it harder for older founders to succeed. Special guest Hedy Ratner, co-founder of the Women’s Business Development Center, joins us to discuss how older entrepreneurs, particularly women and minorities, are being affected. We cover: * Why older Americans are launching businesses in record numbers * How Trump-era policy changes are shrinking access to critical SBA support * Why tariffs and trade policy shifts are squeezing small business margins * What this means for women-, minority-, and veteran-owned businesses * What encore entrepreneurs need to do now to protect and grow their ventures
If you’re starting or running a small business later in life, you’ll want to hear what’s changing—and what resources are still out there to help you thrive. Links: * Women's Business Development Center (WBDC) * SCORE * Small Business Administration (SBA) * Most boomers and Gen X-ers are terrified about running out of money in retirement — even if they’re already retired (Marketwatch)
The 2025 Budget Bill — aka the “One Big Beautiful Bill” — is now law. But behind the headlines and hype, how does it impact your taxes, Social Security, Medicare, estate plan, and healthcare costs?
In this episode of Friends Talk Money, Pam Krueger, Terry Savage, and Richard Eisenberg break down what really matters — no politics, no spin, just the facts that can help (or hurt) your financial future.
What you'll learn:
- What the $6,000 senior tax deduction really does — and who qualifies
- Whether your Social Security will still be taxed
- Big changes to the SALT deduction and why it matters in high-tax states
- Updates to Medicare, Medicaid, and long-term care planning
- New tax breaks on car loans, overtime, and tips (but only for some!)
- How the $15M estate tax exemption could affect your legacy
- A powerful HSA change most people haven’t noticed
Bottom line: If you’re retired or planning for retirement, this bill changes the game. Talk to your CPA, estate attorney, or fiduciary financial advisor now.
Artificial intelligence is quietly reshaping the way we plan—and pay—for long-term care. In this new episode of Friends Talk Money, Richard, Pam, and Terry sit down with Lily Vittayarukskul, Co-Founder and CEO of Waterlily, for a candid conversation about what most people get wrong about long-term care and how AI is changing the game.
In this episode, you’ll learn:
- Why most Americans underestimate the true cost and likelihood of needing long-term care
- How Waterlily uses AI and over 500 million data points to predict your personal care needs
- The real numbers behind self-funding vs. insurance for long-term care
- How to make smarter, unbiased decisions for your future, your family, and your finances
- What’s ahead for AI in financial planning and eldercare
Lily also shares her inspiring journey from NASA intern to health tech entrepreneur, and how her family’s experience sparked a mission to help others plan ahead with confidence.
If long-term care planning has been on your mind—or should be—this is a conversation worth hearing.
Special Guest: Lisa Gomez Big changes are coming to your 401(k) and workplace retirement plans in 2025 — are you ready for them? In this new episode, the Friends Talk Money team sits down with retirement policy expert Lisa Gomez (former Assistant Secretary of Labor for Employee Benefits Security) to unpack what’s changing and how it could affect your money. We’re covering: * How catch-up contributions are getting a big boost for people aged 60-63 * Why Roth 401(k)s are becoming a bigger deal — especially for higher earners * The growing trend of adding private market and crypto investments inside retirement plans (should you be excited or concerned?) * New guaranteed lifetime income options and what they mean for your future paychecks in retirement
Lisa Gomez, who oversaw over 800,000 workplace retirement plans as head of the Employee Benefits Security Administration, shares expert insights on how these changes impact your retirement readiness, the pros and cons of more investment choices, and the crucial role of professional advice.If you're saving for retirement, planning your exit, or already retired, this conversation is for you. Listen now to learn: * How to make the most of new catch-up contribution rules * What “Rothification” means for your taxes and withdrawals * The pros and cons of adding alternative investments to your 401(k) * Smart questions to ask your employer or financial advisor
If you’re like a lot of people nearing retirement, your 401(k) or 403(b) is probably the biggest part of your savings. But do you actually know how it’s invested—or how much risk in stocks you’re taking on without realizing it?
In this episode of Friends Talk Money, we’re going to look more closely. Ron Surz, a long-time retirement investing expert and president of Target Date Solutions joins us—and he’s not afraid to call out where he thinks popular target date funds are falling short. He’ll walk us through what he believes is a better way to structure retirement portfolios, especially for people in their 50s, 60s, and those already retired.
We’ll talk about: * What’s really under the hood in your retirement plan * The real risks inside target date funds—and how they’re built * What Ron recommends instead, and why * What to think about before you roll over your retirement savings * The most common mistakes people make late in the game—and how to avoid them.
Whether you’re in your 50s, 60s, or already retired, this conversation will give you actionable steps to take control of your retirement savings today. * Terry Savage: What's in YOUR retirement plan? (Chicago Tribune) * Baby Boomer Investing Show * Ron Surz, Target Date Solutions (401k Specialist) * 4 Things You Can Control in Retirement (Pam Krueger)
Is your financial advisor truly working in your best interest — or theirs? In this eye-opening episode, the Friends Talk Money team turns the mic toward their own co-host, Pam Krueger, as she reveals the personal story behind Wealthramp, the platform she created to connect investors with trustworthy, vetted financial advisors.
Pam shares the shocking truths she uncovered about conflicts of interest in the financial industry and why too many investors unknowingly work with advisors who don’t prioritize their clients' financial well-being. Learn how Wealthramp is disrupting the traditional advisor model by putting integrity, transparency, and fiduciary responsibility front and center.
If you’ve ever wondered how to find a financial advisor you can actually trust — this conversation is a must-watch.
In this episode of Friends Talk Money, we're joined by Phil Moeller, renowned journalist and co-author of Get What’s Yours: The Secrets to Maxing Out Your Social Security. Phil dives into all things Social Security—unpacking the latest changes, what they mean for you, and how to make smart decisions that can boost your retirement benefits. Topics we cover: * Key Social Security changes for 2025 and beyond * How these updates may affect your benefits * Strategies to optimize your Social Security claiming decisions * Common mistakes to avoid when planning for retirement
Whether you're nearing retirement, already collecting benefits, or helping a loved one make financial decisions, this episode is packed with practical advice and essential information you won't want to miss.
Ready to explore the world without breaking the bank? The Friends Talk Money crew sat down with Barbara Talisman from Talisman Travel Tribe, who shares her top tips for traveling the world on a shoestring budget! From finding cheap flights to scoring affordable accommodations, Barbara's got you covered. What's your go-to tip for saving money while traveling?
Looking for help this tax season? The Friends Talk Money team welcomes IRS spokesperson Eric Smith to discuss important tax changes and tax planning strategies. As a trusted tax accountant for the IRS, Eric breaks down the difference between tax credits and deductions, and shares valuable insights into new tools ‘direct file’ and ‘free file’ and other crucial matters that could affect your finances. Listen for more informative tips on how you should navigate the complex world of taxes!
Rebuilding your finances after a disaster can feel overwhelming, but you're not alone. The Friends Talk Money crew sits down to learn more from Wealthramp-network advisor Mitchell Freedman, CPA/PFS, who’s lived through this before himself. His personal and practical tips on preparing for and recovering from financial crises are invaluable. Mitch highlights how working with a fee-only fiduciary financial advisor can help those affected by a disaster recover financially. Listen to learn more!
Worried whether the stock market is too risky for your retirement money? You’re not alone! We’re going to help you decide how to sleep at night and still invest so you’re money’s working for you. Tune in as the Friends Talk Money team chats with Jim Stack from InvesTech Research to uncover smart strategies for navigating your retirement journey.
Thinking about a Roth conversion but not sure if it's the right move? The Friends Talk Money team breaks down six key things you need to know before making a decision! From tax implications to future benefits, we've got you covered. Curious about how a Roth conversion could impact your financial future?
The Friends Talk Money team is here to help you start 2025 off right!
From organizing your important documents to aligning your investments with your goals, we've got the tools and tips you need for a successful financial year! What financial goals are you going to cross off your list this year?
Debra Whitman Chief Public Policy Officer, AARP joins the Friends Talk Money crew to give us a glimpse into her latest book, ‘The Second Fifty’. Dive into the conversation as Richard, Pam, and Terry discuss the big questions about health, wealth, and longevity in midlife and beyond. What’s the biggest question you have about navigating this new chapter? Listen to learn more!
Ready to make 2025 your best financial year yet? The Friends Talk Money team is here to help! Join Terry, Rich, and Pam as they break down 9 essential tips to set yourself up for financial success in the new year. 1. Unlock Your Financial Future - Begin by consolidating all your year-end IRA statements and harness the power of an online RMD calculator to determine your 2025 minimum distributions. This crucial step ensures you’re setting aside the right amount for a secure future. 2. Refresh Your Records - Keep your IRA beneficiaries up-to-date to safeguard your legacy. 3. Optimize Your Portfolio - Align your investment allocations with your 2025 goals by reviewing your retirement portfolio. 4. Explore Secure Investments - Consider securing a 4% CD, available online, to bolster your financial safety net. 5. Seek Expert Insight - Gain a fresh perspective on your financial strategies by consulting a trusted professional. 6. Enhance Your Security - Use a password manager to protect your personal information and investments. 7. Guard Against SIM Fraud - Contact your phone provider (AT&T, Verizon, etc.) to establish a password-protected process, shielding your SIM from fraudsters. 8. Prepare for Tax Season - With potential tax changes on the horizon, start organizing now to navigate the upcoming tax season smoothly. 9. Reimagine Retirement - As retirement landscapes evolve, envision your future with flexibility, considering the trend of working into later years.
It’s that time of year again! The Friends Talk Money team dives into charitable giving. There are many benefits to contributing to your favorite charity. The conversation is about the tax and personal benefits of giving. But how do you choose the right charities, align donations with your values, and maximize tax savings? Terry, Rich, and Pam share tips on vetting charities and questions to ask your financial advisor. Tune in and join the conversation!
Ready to unlock the secrets to a fulfilling retirement? It’s the most talked-about retirement book in decades! Join the Friends Talk Money team as they chat with retirement expert and best-selling author, Christine Benz! Christine shares some insights on what truly makes retirees happy, how to navigate healthcare choices and the impact of social security on your budget. Plus, you’ll hear what Christine says about getting a second pair of eyes from a qualified financial advisor can provide you peace of mind throughout your retirement. Learn more in this week’s episode and be sure to check out Christine’s new book, How to Retire: 20 Lessons for a Happy, Successful, and Wealthy Retirement.
Medicare open enrollment starts now, and this year things could get a little tricky. Good news! We have three of the country’s top Medicare experts co-hosts, Richard & Terry right here, and we’re joined by Medicare special guest, Philip Moeller, author of Get What’s Your’s for Medicare. Phil walks us through some of the most confusing new changes and offers some helpful tips to avoid costly mistakes. Don’t wait to make changes! Have you reviewed your plan options yet?
A growing number of people 55+ are searching for a deeper meaning and purpose in your life, and heading back to college to find it. And many prestigious colleges and universities are offering specialized programs designed just for those new ‘senior students’. These midlife and later-life reinvention courses are flourishing nationwide, with exciting new opportunities launching soon at Yale, the University of Southern California, and Boston College. Tune in to this week’s episode as the Friends Talk Money team delves into this transformative journey, exploring what’s included, all costs involved, and how these programs can help you achieve a fulfilling and enriching new life in retirement.
Your home is more than just a roof over your head; it’s a treasure trove of memories and emotions. As you consider your estate planning, it’s essential to think about how to pass this cherished asset on to your heirs. The Friends Talk Money team dives into the heart of estate planning and explores all your options for your most emotional asset—your home. Whether you want to keep it in the family, sell it, or create a trust, we’re here to guide you through those tough decisions.
As more retirees seek to reenter the workforce, it is crucial to know how to position yourself for success in today's competitive job market. In this episode, the Friends Talk Money team shares valuable insights on updating your resume effectively. With years of experience in your industry, focus on maintaining a concise and impactful resume. Highlight your achievements with quantifiable metrics and incorporate relevant keywords to make your resume stand out to potential employers. Listen to learn more!
On the latest episode of Friends Talk Money, the crew sits down with IRA and Tax Guru Ed Slott to dive deep into all things retirement savings.
Expert Brian Gordon explains how a recent law created a clever new way to pay for premiums in case you ever need long-term care.
Taking care of loved one’s with special needs can be incredibly overwhelming, especially if you're going at it alone. That's why it's so important to know where to turn for help. Mary Anne Ehlert, founder of Protected Tomorrows, recently joined the Friends Talk Money team to share her personal experience as a caregiver to her sister with special needs. She shed light on the complexities and amount of work that is required to care for someone with special needs and explained what motivated her to start Protected Tomorrows and help families with getting the resources and professional support that they need.
The Friends Talk Money team is joined by Alexandra Armstrong, CFP®, CRPC® who is the chairman and founder of Armstrong, Fleming & Moore, Inc. Alex has worked in the investment field for more than 40 years and back in 1977, was the first person to earn the Certified Financial Planner™ certification in Washington, DC. On this episode, Alex discusses her book On Your Own, a widows guide to emotional and financial well-being and offers useful advice to those who are struggling with becoming a widow.
Our next special guest has undeniably made the most significant impact on your retirement savings strategy. In this episode, the Friends Talk Money team sits down with Ted Benna, the father of the 401(k) plan. Ted shares the fascinating story of how he conceived this groundbreaking idea, navigated the IRS approval process, and gives us a glimpse into his current projects.
There's nothing more painful than losing your job when you're older and not being able to get a new one.
Research says there's a stigma about "older unemployment" - especially when it drags on for more than a year!
Meet Ben who is going through that right now. He remains optimistic, but details the hazards -- even for those in technology -- when a job disappears. Some helpful perspective for you - or someone you might know and love.
The price of prescription drugs can be enormous when you're on Medicare, so in this Friends Talk Money episode, we offer advice on how to pay the least for your medications. With help from expert Diane Archer of JustCareUsa, we discuss when to use your Medicare Part D plan, what to know about prescription discount cards and programs from drug companies and states that can lower your prescription costs.
You're probably familiar with financial literacy, which entails having the skills, knowledge and behaviors to make decisions about money. But how's your longevity literacy? Not sure what we're talking about? In this episode Pam, Terry and Richard break down longevity literacy, and explain the impact, especially when it comes to your retirement readiness. Guest expert, Surya Kolluri, who is the head of the TIAA Institute joins the Friends Talk Money crew to uncover the importance behind longevity literacy and why he believes more Americans should focus on improving theirs.
In this episode Pam, Terry and Richard talk about what’s likely to be the most important financial decision you’ll ever make… what to do with your 401(k) money when you’re ready to retire? The Department of Labor says any retirement advice you get a work should always be in your best interest. The question is… is it? Pam leads the discussion about the DOL’s new proposed Fiduciary Rule and includes special guest Kevin Walsh of Groom Law Group and break down why the DOL’s so worried.
Advice on lowering your debt load and credit card rates, plus pros and cons of filing bankruptcy. With Bruce McClary, Senior Vice President of Media Relations & Membership at the National Foundation for Credit Counseling.
Retiring abroad can be appealing, with lower costs and great weather. But here are some things you also need to consider before making a move.
In this episode, the Friends Talk Money team discusses how you can help set up your grandchildren for financial success beyond the traditional 529 college saving plans. Tune in as Pam, Richard and Terry share helpful tips and savvy money strategies that they’ve learned from their own personal experiences.
The rules for RMDs have changed and you will want to know how much you must take out of your retirement plans and when. We explain it all on this episode of Friends Talk Money, including year-end advice.
The Friends Talk Money podcasts talk about why many of us aren't bestowing inheritances to heirs the right way and not helping our parents make inheritances properly. We also talk about how financial advisers could be more helpful to families so they handle inheritances wisely.
Social Security is clawing back $21 billion in mistaken overpayments — impacting retirees and the disabled. Terry Savage and Larry Kotlikoff have written a new book —Social Security Horror Stories— revealing the shocking abuse. Last weekend they were featured on CBS - Sixty Minutes speaking with Anderson Cooper about this issue. In this episode, Larry joins Terry, Pam and Richard to take a deeper dive into problem and what you should do to ensure you get what’s rightfully yours.
What to know about Medicare Open Enrollment for 2024. What’s new and how to shop wisely for coverage.
Not everyone looks at their personal financial future through rose colored glasses. In fact a recent Gallup poll shows Americans not yet retired are more worried than anytime in the past ten years. Discouraged savers who see the glass-half-empty may actually need different financial strategies just based on their outlook. We give you solid financial planning tips that can make your outlook.
Learn how to lower your repayments and cut years off your loan payments w attorney and expert Rae Kaplan.
- Student Loan Sticker Shock By Terry Savage
- Federal Student Loan Debt Relief
Roger AKA, "The Retirement Answer Man” and author of “Rock Retirement: A Simple Guide to Help You Take Control and Be More Optimistic About the Future,". Roger has been a CERTIFIED FINANCIAL PLANNER™ professional for more than 25 years. He’s sharing how he’s now helping people live well today in retirement without sacrificing tomorrow.
In this episode, Friends Talk Money co-hosts Pam Krueger, Richard Eisenberg and Terry Savage discuss what Medicare does and doesn't cover when it comes to treatments for Alzheimer's Disease and drugs for weight loss. A recent FDA decision means Medicare will be covering a new, game-changing Alzheimer's drug for many people 65 and older, but there are some strings attached. By contrast, Medicare currently won't pay for drugs to lower weight, although it will pay for weight-loss surgery in some cases. An act of Congress, however, could change the rules about Medicare and weight-loss drugs.
In this Friends Talk Money episode, college financing expert Mark Kantrowitz talks with our hosts Terry Savage, Pam Krueger and Richard Eisenberg on how grandparents can use 529 plans to save for their grandchildren’s’ college tuition bills.
A guide to who should consider buying a long-term care insurance policy, what these policies do and don't cover, what age to consider buying it and the newer versions known as hybrid policies and 10-Pay policies. Our guest: Brian Gordon, a long-term care insurance policy expert with Gordon Associates in Bannockburn, Ill.
The Age Wave research and consulting firm and the Edward Jones financial services firm just published a survey of Americans’ views and actions regarding cannonballs and curveballs in retirement. In today’s episode we talk with Lena Haas of Edward Jones about the findings.
Some retirees run into trouble receiving their promised pensions. Others aren't sure if they're eligible to receive pensions. Here's where to go to get help to ensure you get any pension you're due and to see whether there may bea pension waiting for you.
Netflix released a new docuseries that reveals how Madoff got away with stealing $36 Billion from wealthy investors and charities.
It’s been 15 years since the biggest criminal on Wall Street, Bernie Madoff pulled off the largest Ponzi scheme in history. Bernie Madoff may be dead, but there are still plenty of con artists and investment scams and new lessons to learn from this story.
The clock is ticking towards Tax Day, April 18. Here are some timely tips for tax form procrastinators.
Mention the word “annuity” and most investors recoil. There seem to be so many hidden secrets and costs. And high pressure sales tactics along with "free dinners."
In today’s podcast we unravel those mysteries – with the one man who has consistently worked to educate the public to the ins and outs of annuities – as well as some of the better uses of these insurance company contracts. Stan Haithcock’s website – www.StantheAnnuityMan.com -- is a great resource for free basic information and good advice on annuities. And Stan is one of the most entertaining financial speakers you’ll ever meet.
So, sit back and enjoy our podcast. We devote special attention to Multi-Year Guaranteed Annuities (MYGAs), now yielding over 5.5%. They’re the insurance industry’s version of a bank CD, without the FDIC backing. And they are a great way to improve yields either inside or outside your IRA.
To read more about MYGAs, here’s a link to Terry’s column on the subject: https://www.terrysavage.com/an-annuity-that-works-for-you-myga
And if you’d like to listen to more of Stan’s terrific approach to financial markets, both Terry and Pam have recently joined him on HIS podcast. You’ll find the links to these conversations here:
Terry Savage: The Savage Financial Truth in 2023 https://www.stantheannuityman.com/fwa-terry-savage-january-2023 Pam Krueger: Your Wealthramp to Fiduciary Advice https://www.stantheannuityman.com/fwa-pam-krueger-february-2023
Have you given some thought to where and how you’d like to live in your retirement years? Many insist on staying in the family home – without thinking about logistics of stairs and navigating the bathroom in later years. Maybe you’ll just downsize to a smaller home. Others decide to move into a senior community, making new friends in these settings with like-minded and active adults. The latest enticing option is Continuing Care Retirement Communities, which offer initial living in townhomes or condos, while guaranteeing acceptance for one or both spouses into assisted living or even memory care as the need might arise.
This is a financial, as well as logistical and emotional decision, as many of these CCRCs require a large up-front deposit, typically funded by the sale of the family home. Guarantees are involved, but you need to read the fine print. You’ll find an explanation and details in Terry’s recent column.
On this podcast, we will speak with Dana Smith, Chief Marketing Officer for Lifespace Communities (https://www.lifespacecommunities.com/), a non-profit company that has 18 communities in seven states, ranging from Florida to Texas, and Illinois to Kansas. As you’ll hear in this podcast, Dana has the answers to so many questions, ranging from how to get that deposit back to what happens if you run out of money. And she has tips on what to look for and what questions to ask if you are considering moving to a Continuing Care Retirement Community.
Millions of Americans are feeling financially insecure about retirement, but "Retirement Reboot" author and journalist Mark Miller has some practical suggestions. In this "Friends Talk Money" episode, he shares insights and recommendations on: saving and investing for retirement, Social Security strategies, enrolling in Medicare and more.
Congress just passed a bill with the biggest changes for retirement in 15 years. The legislation, called Secure 2.0, has new ways to save for retirement and take money out of savings for emergencies, as well as new rules on how much you'll be required to take out of your retirement accounts and how the government will provide money to match retirement savings for some people. In this Friends Talk Money episode, we tell you what the new law means for you.
The biggest challenge to any retiree’s nest egg is longevity. With the market’s up’s and down’s, persistent inflation and a potential recession ahead, the question is how can you make sure your retirement savings won’t ever go to zero.
The holiday shopping season is officially underway, and like many grandparents and parents, you’re probablysearching for gifts that will make a lasting impression on young people–rather than being quicklyoutgrownor broken. So we have gathered some of our best holiday money gifts for kids of all ages—gifts that will keep on giving for years to come.
With the stock and bond markets delivering lousy returns this year, some investors are wondering whether to add so-called alternative investments to their portfolios. In this episode, Pam, Terry and Richard discuss the risks of investing directly in unregulated asset classes like gold, real estate, commodities and even cryptocurrency and suggest ways that investors may be able to use publicly traded securities to gain indirect exposure to these alternative asset classes with lower risk.
With the stock and bond markets delivering lousy returns this year, some investors are wondering whether to add so-called alternative investments to their portfolios. In this episode, Pam, Terry and Richard discuss the risks of investing directly in unregulated asset classes like gold, real estate, commodities and even cryptocurrency and suggest ways that investors may be able to use publicly traded securities to gain indirect exposure to these alternative asset classes with lower risk.
Ric Edelman, author of the new book “The Truth About Crypto” thinks everyone should have 1% of their investments in cryptocurrencies, including retirement investors. But the U.S. Department of Labor has concerns about allowing crypto in 401(k) retirement plans, just as Fidelity says it plans to let employers allow employees to put up to 20% of their 401(k)s in Bitcoin. The “Friends Talk Money” hosts talk to Edelman about all this and weigh in with their thoughts on putting retirement money into crypto.
Securities regulators estimate that at least 5 million elderly Americans become victims of financial fraud and other scams each year. With this kind of abuse only expected to increase, these regulators are strongly recommending that seniors formally appoint one or more children, relatives or friends as “trusted contacts” with their bank, brokerage company, financial advisor and other financial institutions. These trusted contacts can’t make transactions or even view their friends’ or parents’ accounts. They’re simply additional people the institution or advisor can reach out to if they’re unable to reach the account owners to inform them about suspicious activities or other account-related red flags.
The S&P has been very volatile since January, after reaching many record highs over the past seven years. It’s hard for any investor not to feel overwhelmed and worried during these turbulent times. Watch nationally known financial commentators and co-hosts of the award-winning podcast Friends Talk Money, Terry Savage, Richard Eisenberg and Pam Krueger discuss how to stay focused during this market storm of inflation, the prospect for higher interest rates and global political and economic uncertainty in the aftermath of Russia’s invasion of the Ukraine.
Mental health studies have shown that those who do nothing after retirement increase their chances of suffering from clinical depression by 40%. That’s why many retirees are choosing to “unretire.” This doesn’t necessarily mean going back to work full-time. Instead, it’s about filling your day with activities that bring you satisfaction. But to unretire successfully, you need to plan ahead, perhaps even before you retire.
When it comes to COVID tests, vaccines and medical treatments, the way traditional Medicare Parts A and B pay for these expenses is not always clear cut. For example, right now Medicare only pays for four at-home COVID test kits that you order directly through covidtest.org. However, the Biden administration recently announced that in early spring Medicare will cover the costs of eight free test kits per month, the same number covered by private health insurers. Medicare covers the full costs of vaccines and boosters and the costs of having a healthcare professional administer the vaccine in your home. And if you get infected and need medical treatment in a hospital, Medicare Part A will cover hospital-related costs but you’ll still be responsible for any deductibles, co-pays or co-insurance. In some situations, Medicare might cover some home care costs related to COVID-19 but the rules are complicated. And traditional Medicare offers limited coverage for telehealth services. That’s why if you’re not sure of what is and isn’t covered contact the Medicare administration or your State Health Insurance Assistance Program.
If you think that the stock market has been going through extreme positive and negative price swings over the past few weeks, you’re not imagining things. When volatility occurs, however, it’s important to resist the urge and flee to safety. Remember that, over the long term, stocks have delivered better long-term returns than bonds and cash. The question is: What percentage of your portfolio should be invested in stocks when you’re still saving for retirement or after you’ve retired? If you don’t feel that you have the knowledge or confidence to make these decisions on your own, consider seeking guidance from a fee-only fiduciary financial advisor.
Fifty-four million Americans are over the age of 65. And extended life expectancies, coupled with low birth rates, are moving us toward a “super age” where more Americans will be over the age 65 than under age 18. With higher percentages of people likely to live well into their 90s, your retirement nest egg may need to last 30 years or more. Depending on how much you’ve saved and how you plan to live during retirement, you may need to make some adjustments, like leaving your full-time job at age 70 rather than 65 or working part time during retirement. In this super age, employers in particular will have to adjust to an environment where younger workers will be in short supply. Many will have to end ageist workplace policies and do what they can to retain experienced older workers or create attractive part-time opportunities for those who still have a lot to contribute professionally in their 70s and beyond.
Go to any library or your local bookstore and you’ll see shelf after shelf of books offering practical education on various financial planning and investing. Sorting through these choices can be overwhelming, so Pam, Richard and Terry are here to help by sharing recommendations for money-themed books they have learned the most from. These books will help you fortify your personal knowledge of how to save manage and invest your money. While most of these books have been published within the past few years, several are classics that have been updated over the years.
From donating appreciated stock to establishing a donor-advised fund to contributing part or all of your Required Minimum Distribution from an IRA directly to a charity, there are many ways you can support the nonprofit organizations and causes you care about while also receiving significant tax benefits. However, before you give to any charity, it’s important to conduct background research to make sure the organization is legitimate and that they’re using most of their donations to fulfill their mission.
Whether it’s higher prices at the gas pump or at the supermarket, we’re all feeling the impact of inflation in different ways. Most economists predict that inflation will continue into next year, which could create extreme hardships for seniors living on a fixed income or for those who have had to use more of their retirement assets than they planned for. With the high likelihood of the Fed raising interest rates next year to tamp down inflation, these actions could put a damper on the surging stock market. That’s why now may be a good time to look over your portfolio to see if minor adjustments might be needed to reduce inflation risk in your investment accounts. For example, on the bond side you may want to invest in Treasury Inflation-Protected Securities (TIPS) or I-Bonds, whose interest rates rise or fall with inflation. Or you may want to add a small allocation to gold or gold ETFs, since this precious metal historically has served as a hedge against inflation and volatile stock prices. If you’re very speculative, you might even want to consider making a very small investment in cryptocurrencies. However, If you feel that your portfolio is allocated in a way that combines decent income generation from bonds and capital appreciation from stocks, and you have an adequate reserve of cash for emergency purposes, you may not need to make radical changes to protect against inflation, especially since no one really knows how long it will last. If you’re not sure what steps to take, a qualified fee-only fiduciary financial advisor can offer common-sense advice to help you better “inflation proof” your retirement nest egg without sacrificing its long-term growth potential.
While those approaching retirement often calculate the total income they may receive from Social Security, pensions, 401(k) plans and taxable investments, many fail to consider the impact of federal and state taxes. For example, if you and your spouse file jointly and your combined income is more than $32,000, up to 85% of your Social Security benefits could be taxable. If you have a pension, you’ll have to pay taxes when it’s paid out to you. When you start taking mandatory or elective taxable distributions from your Traditional and Rollover IRA and 401(k) accounts, it’s important to know ahead of time whether these withdrawals will significantly increase your tax bill. If you take distributions from an annuity, any interest or earnings will be distributed first as taxable income before non-taxable principal. If you’re thinking of selling your home, you may have to pay capital gain taxes if the profit from your sale exceeds $500,000. And, of course, you may always have to pay taxes on income and capital gains you earn in your taxable accounts. Considering how all of these taxes could really add up, it’s important to start thinking about how to potentially reduce your future tax burden long before you leave the workforce. For example, if you plan to use your retirement money to pay off your mortgage sooner, instead of making one large one withdrawal, consider making a series of smaller annual withdrawals to keep you from moving into a higher tax bracket. Or, if you’re thinking about converting your Traditional or Rollover IRA to a tax-free Roth IRA, you may want to do this after you stop working but before you start taking Social Security benefits, when your annual income may be less. And you may want to change the way your money is invested in your retirement and taxable accounts to achieve an optimal balance of investment returns and tax management. Given the complexity of these decisions, working with an accountant and a qualified fee-only, fiduciary financial planner can help ensure that these challenges won’t significantly tax your patience—or your nest egg.
From specialized piggy banks for younger children to establishing custodial brokerage accounts or Minor Roth IRAs for teenagers, there are a variety of ways you can give your kids a head start on understanding the importance of saving, investing and appreciating money this holiday season. And don’t forget the most important gift of all—a college education, which you can make more affordable by establishing a 529 College Savings Plan for each child. Earnings are never taxed and can be withdrawn tax free if they’re used to pay for qualified educational expenses. Each parent can contribute up to $15,000 per year per child with no gift tax implications and each grandparent can make one-time, gift-tax free contributions of up to $75,000.
Since the start of the COVID-19 pandemic, 42% of consumers have increased the amount they owe for mortgages, student loans and car loans. The one bright spot is that the average amount of credit card debt has fallen during this time period. However, 54% of consumers with credit cards don’t pay in full each month and 18% owe more than $20,000. And the growing popularity of online “Buy Now, Pay Later" (BNPL) programs offered on many online retail websites such as Amazon and Walmart may end up increasing the mountain of debt many Americans are struggling to escape. According to research from Credit Karma, 40% of American consumers have used on these programs, and it's easy to see their attraction. BNPL allows consumers to make purchases now and receive the items right away, while paying them off in four payments. For people who are good at managing and paying off debts, these programs enable them to spread out the costs of purchases without taking on additional credit card debt. However, missing any of these payments can result in stiff late fees and interest charges. Credit Karma's research reveals that 34% of BNPL users have fallen behind on payments and 55% of younger consumers have missed one or two payments. Those who consistently miss payments for BNPL or credit card purchases may also be reported to credit agencies, which could seriously damage their credit score, making it even more difficult to be approved for future loans or credit cards. That’s why it’s critically important to safeguard your credit reputation. If you can, try to pay for online purchases with a debit card. If you use a credit hard, commit to paying off the balances in full each month. If you have outstanding credit card debt, try to reduce it as fast as possible, even if this means forgoing other purchases. And if you want to use BNPL this holiday season, make sure you make each payment on time.
During the annual Medicare open enrollment period, from October 15 through December 7, you can make many changes in your Medicare coverage. But it’s important to understand the potential impact of making changes—or making no changes at all. First, if you’re in a Traditional Medicare program, you should sign up for a Medicare Part D prescription drug program within six months of enrolling in Medicare to avoid paying a late-enrollment penalty even if you’re not on any prescriptions right now. If you have Part D coverage already, it’s important to review your plan every year during this time to find out how much the annual premiums are rising or whether the prescription drugs you use now are still covered by the plan at the same costs. If your current plan no longer meets your needs and budget, consider switching to another plan that does. During the open enrollment period you can also switch from Traditional Medicare to an all-inclusive Medicare Advantage plan. While Medicare Advantage plans have lower premiums than Traditional Medicare, they’ll generally only cover physicians in their network and all requests for non-emergency care must be approved before they’ll cover the expenses. And if you have a catastrophic illness, you may end up having to pay up to $7,500 per year in out-of-pocket expenses billed by in-network healthcare providers—and up to $11,000 for out-of-network providers. That’s why it’s critically important to read the fine print and understand what is and isn’t covered by any Medicare Advantage plan and compare it to the costs of your current Traditional Medicare coverage. Fortunately, there are many resources you can turn for help in this complicated decision-making process. If it still seems overwhelming, considering working with a qualified fee-only fiduciary financial planner who can help you understand your various options.
Clarification: In the discussion of the maximum out of pocket costs for Medicare Advantage plans, listeners may have had the impression that Traditional Medicare plans don't have deductibles or co-pays. In fact, Medicare Parts A, B and D do have either deductibles, copays, or both. Unless you add supplemental Medicap coverage to cover these costs, you could end up paying significantly more out-of-pocket each year for critical medical care than with a Medicare Advantage plan, since Traditional Medicare has no annual cost caps.
What makes people happy during retirement? Research shows that while financial security isn’t the most important thing, it’s near the top of most retirees’ lists. But it’s also important to think about what your life after full-time work will be like. Do you have social connections with whom you can share good stories and reach out to in times of need? Do you have enough outside interests, from hobbies to volunteering to keep you occupied? Do you have a plan B, such as thinking about part-time jobs that might interest you if you miss working? It’s important to think these things through because research also shows that unhappy retirees often feel that they no longer have a purpose in life or haven’t given enough thought about what they’re retiring into, rather than what they’re retiring from. In terms of financial security, happier retirees know how much they need to save to live relatively comfortably. They’ve paid off their mortgage or are close to doing so. And, they have several sources of income to rely on. A fee-only, fiduciary financial planner can help you figure out the financial aspects of retirement, but you may also want to seek out the services of other professionals who can help you anticipate the emotional aspects of retirement.
The best time to start thinking about where you may want to live during retirement is long before you retire. While many people spend a lot of time pondering the kind of home they want to live in, they often don’t spend enough time researching the state, town or neighborhood where it may be located. But location may be the most important factor that determines how happy and healthy you’ll be in your new part-time or full-time residence. That’s why you’ll want to thoroughly research any locale you’re considering. How accessible stores and services are. The quality of local hospitals and healthcare professionals. Weather conditions. Whether your potential neighbors are the kinds of people you can make friends with and who can be counted on to help you in an emergency. How easy it is for your children and friends to travel there to visit you. Whether income, sales and estate taxes are lower than where you’re living now. How much of a mortgage you’ll need to take out if you plan to buy a new home. How quickly your home could be sold if and when you pass on or you need to move into an assisted living facility. Once your online research helps you narrow your choices down, plan on taking a trip to visit the top towns or neighborhoods on your wish list. If you find one you really like consider giving it a test drive by renting for a few months to get a real feel of what living there while could be like you’re still able to drive, shop, walk and go out at night. You might need to spend a year or more conducting all of this research, so it’s important to give yourself a head start before you actually plan to make your move.
Even though tax-deferred Traditional IRAs have been around since 1974 and tax-free Roth IRAs since 1997, you don’t hear a lot about them these days. Yet, for many people, especially those who are self-employed or don’t have retirement plans at work, IRAs still represent one of the best tax-advantaged ways to save for retirement. As long as you have earned income and your total annual income isn’t too high, you can contribute to an IRA every year. While both IRAs allow for tax-deferred growth, only the Roth IRA allows you to withdraw earnings and contributions totally tax-free at age 59½ or older. However, you make after-tax contributions to a Roth. While contributions to a Traditional IRA can be tax-deductible, you will have to pay taxes when you make qualified withdrawals after age 59½. And with a Traditional IRA, you have to start taking annual required minimum distributions (RMDs) at age 72, whereas you never have to take RMDs from a Roth IRA. But you don’t have to choose one or the other. As long as you have earned income and your Modified Adjusted Gross Income isn’t too high, you can open both a Traditional and Roth IRA. However, you can only make a total combined contribution of $6,000 each year ($7,000 if you’re over 50) to your IRAs. And if you already have a Traditional IRA or a Rollover IRA (funded with pre-tax assets you roll over from one or more company retirement plans) you’re not stuck with it. You can use a Roth conversion to move some or all of your Traditional or Rollover IRA assets into a Roth IRA. However, you will have to pay taxes on the converted amount, so it’s important to make sure the conversion doesn’t push you into a higher tax bracket. If you’re not in a hurry, you might want to wait to do it until the next market correction, when the value of your account will have fallen from its peak. And while there’s lots of talk about how tax proposals in Washington could potentially impact the tax benefits of IRAs, these changes will most likely only the wealthiest Americans. If you’re not sure which kind of IRA to invest in or how to complete a Roth IRA conversion in a tax-efficient manner, consider hiring a qualified fee-only financial planner. The fee you pay them for their guidance may pay for itself in the taxes you’ll save both today and down the road.
There’s a common axiom that most financial decisions are based 1% on facts and 99% on emotions. Fear and stress of any kind, whether they’re job-related, pandemic-related, or financial security related, can impact our spending, saving and investment behaviors. Negative emotions lower our confidence, and the less confident we feel, the more likely we are to give into impulses, whether it’s spending more on alcohol, drugs or unhealthy food or panic-selling stocks when the market is falling. If you recognize the detrimental effects of negative emotions, you can begin to make plans to get your financial life in order. The best time to do this is when your life is relatively stable and the market isn’t going through gyrations. This may also be a good time to seek the services of a trustworthy, fee-only financial planner who can give you greater peace of mind by helping you confront the known and often unknown factors that cause fear and stress. They can offer objective, realistic guidance that lets you know where you are financially today and what you can do to improve your chances of achieving your short and long-term financial goals. But before you hire a financial planner, it’s important for you to set expectations for this relationship. What do you need the most help with: Cashflow analysis? Retirement, estate and tax planning? Investment management? Asset protection? The specific issues, stresses and fears you want to address will help you narrow your search to the kind of advisor who has the requisite skills, experience and resources.
Social isolation, greater use of technology and the flood of stimulus checks and government aid programs during the COVID-19 pandemic have led to a dramatic increase of people victimized by cybercrime and financial fraud. Fraud reports received by the Federal Trade Commission in 2020 increased by 24% over 2019’s figures, from 1.7 million to 2.1 million. More and more Americans many of them elderly, are increasingly falling for online and phone schemes perpetrated by criminals posing as financial institutions, online retailers, government agencies and charities. These scams fool them into providing their Social Security number or other personal information or convince them to click on links that open the door for hackers to take control of their computers and mobile devices. The best way to protect yourself against these scams is to be ever vigilant. No legitimate company or government agency will ever ask you to provide confidential information in an unsolicited phone call, text, or email message. Get in the habit of immediately deleting any suspect messages or hanging up on any suspicious callers. If you’re uncertain whether the request is legitimate, look for the institution’s or agency’s legitimate phone number online and contact them just to be sure. Or seek advice from a friend or family member. And if you become a victim of financial fraud or identity theft, immediately contact your credit card company, bank and other financial institutions to freeze or close your accounts. Even if you avoid being scammed, you can still report these attempts to federal agencies or your local police department to help others from becoming future victims.
Vanguard Funds’ John Bogle once said, “Investing should be boring.” During sustained market rallies, when the S&P 500 seems to hit new record highs every week, this often seems like good advice: Just set it and forget it. The problem comes when the market suddenly hits a period of turbulence. When this occurs, spooked investors often make bad mistakes—like selling stocks and stock funds at a loss. Anyone who bailed out of the stock market in spring of 2020 when the S&P 500 dropped by 30% only to see it fully recover by mid-summer learned a costly lesson about giving in to irrational impulses. So, how can you keep from making bad decisions? Well, just as the best time to get an umbrella is before it rains, the best time to start thinking about making changes to your investment portfolio is during periods of calm before a potential market storm. One good way to do this is to automatically rebalance your portfolio at least once or twice a year at designated times. For example, if the targeted asset allocation in your IRA or 401(k) account is 60% stocks and 40% bonds and rising stock prices have increased the stock allocation to 70%, consider selling 10% of your stocks or stock funds whose price you believe have peaked and use the profits to buy more bonds to restore that 60/40 mix. Or, if you’re close to retiring and realize you will need to withdraw more money from your retirement accounts each year than you originally expected, consider reducing your allocation to stocks when the market is still calm and move the proceeds into cash or money market funds. That way, if an extended bear market happens later on you won’t have to sell as much stock at a loss to generate the cash you need to live on. To make these decisions effectively you need to understand the connection between your investment strategy and your financial goals and have the self-discipline to make these adjustments even during volatile markets. If you don’t feel qualified to do this yourself, consider working with a fee-only fiduciary financial advisor. Entrusting them to keep your investment plan on track through all kinds of market conditions will give you greater peace of mind in knowing that your financial future is in good hands.
According to Michael Clinton’s new book, Roar: into the second half of your life (Before it's too late), those who are approaching retirement should focus less on the idea of leaving the full-time workforce and more on what they can do to find the most fulfillment during this time. Whether it’s working part-time, starting a new business, taking up a new hobby, traveling, volunteering for causes your care about or mentoring young people, these various “layers” can shift your mindset from “retiring” to “rewiring.” And while you don’t need to be wealthy to enjoy a fulfilling life during retirement, meeting with a qualified financial planner can help you paint a realistic picture of what your finances will be like during your second half and which items on your “roar-wish- list” are truly attainable.
Medical care is becoming a for-profit business even among nonprofit providers. Despite huge advances in technology, care is increasing impersonal, primary care physicians are getting harder to find, and patients are constantly being hit by “surprise charges” from medical procedures that are financially devastating. Many of these charges are unexplained up front and may be incurred by physicians, residents and fellows who are not part of your network. In this environment, it’s up to you to be your medical advocate, or ask someone you trust to serve in the role of healthcare proxy to come with you to appointments to ask key questions you may be too overwhelmed to ask yourself. When evaluating primary physicians or specialists, ask questions such as “Is your practice independent, or owned by a larger conglomerate?” “Does you or your practice receive compensation or special benefits from pharmaceutical companies?” “Are there ways for me to reduce costs, such as paying one co-pay that covers multiple visits?” “Can we meet virtually, and can I contact you via text or email?” Before you agree to any kind of potentially costly procedure, ask both your physician and your healthcare provider questions such as “How much will this procedure cost me out of pocket?” “Will all the physicians involved be in my network?” “Are there less expensive alternatives to an operation, such as physical therapy or prescriptions drugs?” And if it’s a major operation, you’ll want to be assured that the surgeon you’re consulting with will perform it, rather than a resident. If you or your healthcare proxy doesn’t feel they have the knowledge to sort through these issues, consider hiring an independent professional patient advocate or billing specialist.
Some people describe the current economy by paraphrasing Dickens: It is the best of times, and it is the worst of times.
It’s a common belief that owning a home is an investment, but the reality is otherwise. While the national year-over-year appreciation rate of 14.5% (as of April 2021) may seem high, this figure includes both areas where housing prices are skyrocketing as well as regions where appreciation is relatively low. Once you add the costs of owning a home—mortgages, taxes and home repairs—into the equation, the actual appreciation rate of the average home barely matches the inflation rate. So, for many people, their home not only isn’t an investment, but, depending on the never-sending cycle of home maintenance costs, it may end up being a money-losing proposition.
Investment clubs are a great way for people to sound out investment ideas, ask questions, and increase their knowledge of the stock market with the help of friends and family members. The popularity of investment clubs, which started in the 1950s, has waxed and waned over the decades, but during the pandemic there has been a resurgence of interest. Social media and virtual collaboration tools make it easier for people to organize and participate in clubs. A new generation of no-fee trading apps enables people to buy fractional shares of expensive stocks with no account minimums. There are even dedicated sites that can help people form their own clubs or join other existing clubs. Some sites can even help clubs calculate investment results, maintain accurate accounting records and generate required tax forms. While participating in an investment club is fun and can help you become a more confident and knowledgeable investor, you should consider the money you invest to be “fun money” that you can afford to lose. The bulk of your investment assets should be invested in a diversified long-term portfolio that’s designed to align with your financial goals, rather than make quick profits.
Thirty nine percent of those recently surveyed by Nationwide Insurance don’t know at what age they’re eligible to receive full Social Security benefits, and 70% said they wish they knew more about this complex topic. In general, if you don’t need Social Security income to make ends meet, there are huge advantages for delaying your benefits as long as possible. For every year past the minimum retirement age of 62 you wait, up to age 70, you’ll receive an 8% increase in payments. And if you wait until your full retirement age (65-67 depending on the year you were born) your benefits won’t get cut if you’re still working and earn over a certain amount. Unfortunately, these scenarios become more complicated at the household level. For example, if you and your spouse were born before 1954, you may be able to claim spousal benefits. If you’re divorced you may or may not be able to claim some of your ex-spouse’s benefits. And if your annual income is above a certain level, between 50%-85% of your benefits may be subject to federal taxes. It’s critical to view any Social Security scenario within the context of your overall life expectancy and retirement planning strategy, which should consider projected future expenses—including Medicare and long-term care costs--and additional income from part-time work, pensions, 401(k) plans and IRAs. Given the complexity of these issues, you may want to work with a fee-only financial advisor who can help you make more holistic retirement planning decisions. However, it’s important for the advisor to fully understand the rules around Social Security and Medicare. If they don’t, they should have access to accredited professionals who can help them—and you—make these critical decisions.
The easing of the COVD-19 pandemic, increased consumer spending, supply shortages and continued government stimulus have resulted in the highest inflation rate since 1992. People are feeling its effects at the gas pump, at the supermarket, at car dealerships, at building supply companies and when they make hotel and airline reservations. But will inflation continue indefinitely, or even rise to the record levels of the early 1980s? Most economics believe it won’t. They predict that inflation will level off after consumers get their pent-up spending out of their systems, supply chain issues are resolved and pandemic-related stimulus spending eases. The Federal Reserve is keeping a close eye on inflation and is likely to increase interest rates and tighten the money supply if it sees inflation rising much beyond its target 2% annual rate.
While inflation does affect consumers’ pocketbooks, it’s important to remember that it’s a symptom of a recovering economy and that the inflation rates you see quoted in the news are year-over-year rates. This means that inflation today is being compared to the same period in 2020, when lockdowns and millions of lost jobs depressed consumer spending. Still, if you’re worried how inflation and rising interest rates could affect your financial security during retirement you may want to see how different rates could affect your current financial and investment plan. When interest rates rise, prices of existing bonds will fall, which means you may want to avoid buying long-term bonds or CDs. You may also want to increase your stock holdings, since, historically, stocks have outperformed inflation by a wide margin. If your mortgage rate is high, you may want to reconsider refinancing at today’s low rates even if this extend your payoff period by a decade or more. If you don’t feel comfortable making these important decisions on your own, consider working with a fee-only fiduciary investment adviser. They can stress-test your entire financial picture against various inflation scenarios and suggest actions you may want to take to reduce its potential impact.
According to a new investor study from Ascent, 50 million Americans are likely to make their first investments in cryptocurrencies in the next year. The skyrocketing popularity of Bitcoin and other cryptocurrencies has convinced even former skeptics such as Warren Buffett that these digital currencies should be taken seriously. One reason why many doubters are becoming believers is because of the transformative blockchain technology that underlies cryptocurrency transactions. Blockchains are databases that record all transactions in a way that anyone can see and no one can delete or change, bypassing the need for banks, brokerage companies, or even advisors to serve as the middleperson for these transactions. Blockchains have become such a legitimate technology for digital transactions that even the U.S. government is now thinking issuing digital dollars at some point in time.
However, it’s important to remember that the reliability and transparency of Blockchain in no way lessen the highly speculative and unregulated nature of cryptocurrency trading. Those who are thinking about investing in any of the thousands of cryptocurrencies available may want to limit the amount of money they invest and treat it as a gambling activity—meaning they should be prepared to lose everything. Those starting out should stick with known cryptocurrencies like Bitcoin and Ethereum and use established exchanges like Coinbase and Kraken to trade them. Those who don’t feel comfortable purchasing cryptocurrencies directly may want to consider investing in exchange traded funds that invest in these digital currencies.
93-year old Beverley Schottenstein trusted her grandsons to handle her $80 million investment account at JP Morgan but learned later, both the brokerage and her grandsons had made millions cheating her. Find out how in Part 2.
Beverley Schottenstein is the matriarch of a billion dollar family empire. At age 93, she went into battle against one of the biggest banks in the world... and her own grandsons to teach them the lesson of their lives about much more than money.
Only 17% of low and moderate-income adults aged 50 or older believe they are in good financial health, according to research from the Financial Health Network. Many of these people don’t have enough income or assets to work with a financial planner. This leaves them with many unanswered questions about how to manage their income and reduce their debts during retirement, how to choose Medicare coverage, and when they should start taking Social Security benefits. While robo-advisors can help people make smarter decisions about investing, these apps don’t address personalized financial planning advice. And while there still isn’t a single app that addresses all of these issues, there are many low-cost solutions that can address some of them, many of which also offer access to human assistance.
According to the Employee Benefit Research Institute 2021 Retirement Confidence Survey, more than half of workers and a third of retirees said that debt was a major problem in their household. Too much debt can negatively impact your credit score, which banks and other lenders use to determine whether to approve your credit card or loan request and how much interest you’ll pay. That’s why it’s important to check on your creditworthiness on a regular basis. You’re entitled to receive one free credit report per year from each of the three main credit reporting agencies—Equifax, Experian and Transunion. Through April 2022, you can also receive free credit reports every week from these agencies. These reports will include your current FICO credit score, which is based on how much total debt you owe, your on-time payment record, and how long you’ve held different loans and credit cards. Any credit score above 700 is considered to be very good. Your credit score can change on a weekly basis, and the best way to raise it is by reducing your outstanding debt balances and making on-time payments. Another good reason to check your credit reports on a regular basis is to identify any errors that may negatively impact your score or to make sure that identity thieves haven’t opened fraudulent accounts under your name. To prevent future fraud, you can place a credit freeze through all three credit reporting agencies. This will prevent criminals from being able to open credit cards or loans using your stolen personal information, and you can “unfreeze” at any time. To help your children begin to establish their credit history without falling into a debt quagmire, encourage them to apply for a credit card with a low credit limit or one that’s secured by a deposit. And if you’re planning to co-sign a loan for a child or a relative, make sure you monitor their payments, since their delinquency will negatively impact your credit score.
Most retirees want to live independently as long as possible. But it’s important to have realistic expectations of what you’ll be able to do on your own as you grow older. According to a University of Michigan survey of 8,000 seniors, 31% of respondents between the ages of 80-89 said they could live independently. That number dropped to just 4% for those over 90. If you’re hoping to live independently by staying in your home—or moving to a condo or townhouse in a retirement community—you’ll need to think about how you may eventually need to adapt your dwelling to accommodate physical limitations that naturally occur as you age. Fortunately, there are plenty of companies that specialize in installing stairlifts and making bedrooms and bathrooms wheelchair accessible. Mobile devices and smart-home technologies make it easier to get immediate help if an emergency occurs. If you’re living on your own, it’s also important to develop and maintain a multi-tiered social network of people who can help you—and whom you can help in return. Family, friends, neighbors and members of your house of worship can all play different roles in this network. Try also to build strong, mutually beneficial relationships with one or two younger people who are willing to help you during emergency situations. And make sure to formally designate people you trust to serve as your financial and healthcare proxies if and when you’re no longer able to make these critical decisions on your own.
According to a recent MetLife survey, 19% of full-time Baby Boomers said they would need to delay retiring because of COVID-19-related financial challenges. However, in the same survey, 12% said that the pandemic had convinced them to retire earlier, citing reasons such as dissatisfaction with their job or “life is too short.”
There’s also a growing movement known as Financial Independence, Retire Early (FIRE). These workers, mostly highly paid Millennials and Generation Zers, are committed to saving and investing as much as possible and paring non-essential spending to the bone so they can retire in their mid-50s or earlier.
Whether you’re hoping to retire in your 50s or plan on working into your 70s, it’s important to evaluate whether you’ll have enough income to last potentially thirty years or more. Start by estimating your life expectancy, which is based on your family history as well as your current physical health and lifestyle habits. Next, consider whether you can delay taking Social Security until age 70, when you’ll earn the maximum benefits. Then calculate how much your 401(k) plan and IRA accounts will be worth at your desired retirement age and estimate how much of an income hit you might take if a bear market drives down the value of your retirement assets by 25% or more when you first start making withdrawals.
If there’s a strong possibility that you won’t have enough income from Social Security and your savings, consider whether it makes sense to invest some of your nest egg in an annuity that will provide guaranteed income for life or if you may need to delay retiring or take on a part-time job after you’ve stop working full-time.
These are complex issues and the cost of making the wrong choices today could threaten your future financial security. To give you greater peace of mind, consider seeking the advice of a fee-only fiduciary financial planner. These professionals can objectively analyze your current and future spending and income sources, your outstanding debts, and the size and holdings in your retirement accounts to provide a realistic assessment of how likely you are to achieve your retirement goals and what you can do to improve your chances.
Many retirees allocate 60% or more of their portfolios to bonds, having followed the traditional mantra that fixed income securities are less risky investments than stocks. But what many are finding out is that with interest rates at historically low levels, the bonds they own may not be generating significant income and, in fact, may be hindering, rather than boosting, their portfolio’s total returns.
With money market instruments earning less than 0.5% and most long-term CDs earning less than 2%, the reputation of fixed-income investments as safe and reliable income generators has taken a beating in recent years.
Investors looking for a mix of credit quality and higher yields are having to seek out U.S. government and corporate bonds with maturities of ten years or more. But these long-term bonds carry risks as well. Should economic growth, rising inflation and reduced global demand for U.S. government bonds compel the Federal Reserve to raise interest rates in coming years, this will result in higher interest rates for new bonds and falling prices for existing bonds to make their relative yields more attractive. Long-term bondholders may end up losing money if circumstances require them to sell their bonds.
In this environment, investors may want to play it safer and look for CDs or bonds with maturities of six months to a year. While yields for these short-term securities will be lower compared to those of longer-term bonds, investors won’t have to wait as long (or potentially sell a bond at a loss) to reinvest their principal in higher-yielding bonds that may be available down the road.
If you don’t have the time or desire to buy individual bonds you may be better off investing in short to intermediate-term actively managed bond funds. Their portfolio managers are experts in buying and selling bonds to take advantage of different interest rate environments. But when comparing bond funds with similar characteristics and track records, you should closely scrutinize expenses and management fees. A fund with an annual return of 3% per year and 1.5% in annual fund expenses will deliver a net return for investors that is much lower than a similar fund or EFT that charges 0.75%. If you don’t feel comfortable doing this research on their own, you may wish to work with a fee-only fiduciary investment adviser. These professionals can objectively review your entire portfolio and recommend cost-efficient changes that will make all of your stock and bond investments work harder for your retirement.
Clarification: When Terry mentions that during times of rising interest rates when an investor with a long-term bond "is stuck earning a slightly lower yield for the remaining 10 or 15 years or the life of the bond," she means that that this bond's yield will be lower relative to higher yields that may be available from newly issued bonds or existing bonds that are now priced lower. When an investor buys a bond, its yield is locked in and will never rise or fall for as long as they own it.
New research from EMD Serono’s Embracing Carers initiative found that 54% of family caregivers said that the COVID-19 pandemic has worsened their financial health. To help pay for their parent’s medical and living costs, children may have to use money they were saving for retirement or their own children’s higher education. If a caregiver has to quit a full-time job, this may reduce their future Social Security benefits and keep them from saving for their own retirement at work.
There are a number of ways parents and children can work together to ease this financial burden for both sides. First, parents need to help document all of their financial information, including location of assets, titles and deeds, attorney and accountant contact information, and life and burial insurance policies. Before a crisis occurs, parents should assign healthcare and financial power of attorney to their children to allow them to make key decisions when they’re no longer able to able to do so on their own.
Parents should also consider getting long-term care insurance to enable them to receive skilled care in their homes without consuming all of their savings. Some policies can be combined with life insurance to provide death benefits to heirs if the long-term care benefits aren’t used.
Children need to be sensitive in the way they bring up these issues. Start by offering to do small tasks, such as opening their parents’ mail or making sure bills have been paid. When it’s time to make major decisions, frame the discussion as a gift between generations: Children give their time to help their parents deal with declining health, and parents provide the financial support and cooperation to prevent this assistance from becoming a burden. To help sort through these complex issues, parents and children may wish to hire a qualified fee-only fiduciary investment adviser. But it’s important to research their background and licenses to make sure they’re not members of the large community of scammers and criminals who prey on the elderly.
According to a recent UBS poll, 60% of women surveyed let their spouses and partners handle their finances. This is not uncommon, even among wealthy couples. The gradual shifting of financial responsibility and knowledge to one person often begins early in the relationship. But if the couple goes through divorce or the family financial manager dies or becomes physically or mentally incapacitated, their spouse or partner will have to scramble to figure out where their money is, how it’s being invested, and how debts are being paid while they’re also dealing with a legal or healthcare crisis. That’s why it’s important for couples to discuss these issues candidly and transparently, especially before retirement, so that either spouse or partner gains the knowledge they need to step in and manage their finances should a crisis occur. If this task is too challenging or contentious for a couple to do on their own, they should consider hiring a fee-only fiduciary financial planner to help organize and document their income, debts, savings and investments and serve as their impartial educator and mediator.
Right now, millions of high school seniors are receiving acceptance letters and financial aid offers from colleges and universities. These offers usually include a combination of merit-based scholarships and grants, student loans, work study grants, and private parent loans. In past years, it was challenging to convince many schools to increase this aid. But according to author and college planning expert Ron Lieber, with the COVID-19 crisis reducing the number of applicants to most schools, parents are now in a better position to diplomatically ask for better offers. But this can be a confusing process. Parents need to negotiate scholarships and grants with the Admissions office, and loans and work study grants with the Financial Aid office. When meeting with these officials, parents should feel free to ask them to match or exceed the more generous financial aid offers their children have received from other schools. Even after students have accepted an offer, they should seek additional money by applying online for a share of the billions of dollars available through thousands of private grants and scholarships. Even with all this aid, parents’ share of their children’s annual college costs will still be significant. They should try to borrow as little as possible, particularly through private parent loans whose payback periods could last a decade or more. This is particularly important for parents who are approaching retirement age, since some of their Social Security benefits may be garnished if they’re unable to make monthly payments on their own. For parents with younger children, contributing to a 529 College Savings Plan as early as possible can give them a head start on building a reserve to help pay for future educational costs. Grandparents, too, can help by contributing to these plans or giving up to $15,000 a year per child without gift tax implications. The most important thing is to not let your fear about your children’s future or your guilt about what you’re able to afford keep you from making the right financial decisions.
As Richard says, “It’s a doozy of a tax year.” The IRS will be way behind in issuing refunds, yet the deadline for filing your 2020 federal tax returns is still April 15. For most people, it will be filing as usual, but there are situations where special attention may be required. If you earned $75,000 or less ($150,000 as a couple) in 2020 and should have received a $1,200 government stimulus payment last year and a $600 payment in January but didn’t, you can claim these missing payments when you file your 2020 federal tax return. Even if you made no income last year, you still need to file if you want to claim these missing payments. If you donated to charity last year, you can deduct up to $300 in cash contributions even if you can’t normally itemize deductions. If you’re under age 59½ and took advantage of the CARES Act provision to take up to $100,000 out of your Traditional IRA or 401(k) account without early withdrawal penalties, you’ll still have to pay taxes on this withdrawal. But if you fully reinvest the amount you withdrew within the next three years, you’ll be able to request a refund for the taxes you paid. If you were one of the millions of Americans who received state unemployment benefits last year, you’ll have to pay taxes on those benefits. Unfortunately, if you were working for your employer at home last year, you won’t be able to deduct any money you paid for furniture, equipment or other job-related expenses. However, if your income declined significantly from previous years, you may qualify for tax relief. And if you’re expecting a refund or your missing stimulus payments, make sure you file electronically and allow the IRS to deposit this money into your bank account. Otherwise, you may have to wait months to receive the money you’re owed.
In January, news from Wall Street was dominated by the GameStop saga. To put it simply, a group of individual investors belonging to a social media forum called WallStreetBets started buying shares of GameStop, a moribund online videogame retailer. This speculation drove the price up from $20 to nearly $500 in three weeks. The WallStreetBets clique pitched a Main Street versus Wall Street story, claiming that they were trying to punish hedge funds, which were making huge bets that the price of GameStop would go down. For a time this worked. Early investors became stock multimillionaires, and some hedge funds were on the verge of bankruptcy before the madness petered out and GameStop lost more half of its value by the first week of February. While the hedge funds ended up okay, individual investors who bought shares right before the bottom fell out were the biggest losers. This saga created a clamoring for regulators to step in and stop this kind of market manipulation, and focused industry ire on Robinhood, a popular, no-cost trading app that many of the WallStreetBets crowd used to buy GameStop shares. While this story is fun to read about, there’s no need for most retirement investors to lose sleep over it. The market is heavily regulated. Over the long term prices reflect what’s going on in the economy, and are rarely impacted by price gyrations among a few small companies. Investors who own a diversified portfolio of stock and bond mutual funds in their retirement accounts have even less to worry about, since these funds hold many different kinds of securities, so if the price of one goes down it will be offset by the rising price of another. If you do want to dabble in individual stocks, research each stock first to see if its current price reflects the company’s real value. If you buy shares, set a target price at which you’ll sell out and stick with it. That way, you won’t get stung when the bubble bursts.
According to the Social Security Administration, the number of retirees who drew Social Security outside the U.S. jumped 40% from 2007 to 2017. While the COVID-19 pandemic has put the brakes on Americans’ plans to more aboard, once the crisis is over there’s likely to be an explosion of retirees choosing to live outside the U.S. part of the year or permanently.
While it’s fun to dream about spending your retirement years in Europe or in a tropical paradise, there are many issues you need to think about before making such a life-changing decision. Your Medicare plan may or may not provide coverage in foreign countries, so it might be necessary to purchase supplementary medical insurance. Even if the nation you’re considering offers free or low-cost government-subsidized healthcare, you may not be eligible for it as a non-citizen. And the quality of physicians and facilities in that country may be inferior to those in the U.S.
If you plan to earn income while living aboard, you may have to pay taxes to both your adopted country and to the U.S. Banks and financial institutions in developing nations may charge higher fees and have lax standards for protecting against fraud.
In terms of protecting your financial interests in the U.S., most countries now allow ex-pats to have dual citizenship, although it could take several years for you to become a citizen in your adopted home. And, if the nation you’re emigrating to requires you to give up your U.S. citizenship, you’ll be taxed on the value of the remaining assets in your estate.
That’s why if you’re still committed to retiring abroad after the pandemic subsides, it’s critical to thoroughly research the financial, healthcare, and lifestyle pros and cons of the countries you’re considering. And even if you find what seems to be the perfect location, consider renting first before you make a permanent investment in your new home.
According to research from Fidelity Investments, retirees should expect to pay $295,000 for healthcare during their retirement years, and this doesn’t include the costs of long-term care. Guest speaker and author Philip Moeller says that while retirees can find many ways to lower their healthcare costs, it takes a lot of time and effort.
A major decision facing those turning 65 is whether to choose Traditional Medicare plus optional prescription drug and supplemental insurance or sign up for an all-inclusive Medicare Advantage plan. While premiums for Medicare Advantage may be lower, your choice of doctors, facilities and prescription drugs may be limited and out-of- pocket expenses could be higher.
People who aren’t committed to seeing specific physicians in person may save money by using telemedicine providers. If your physician is recommending medical procedures, get a cost estimate from your healthcare insurance provider, or use web sites that offer comparison pricing for these procedures.
For prescription drugs, don’t automatically have your physician send your prescription to a local pharmacy. Bring it there yourself and ask the pharmacist if lower-cost generic alternatives or discounts are available. Prescription drug price comparison web sites can help you find lower prices at local pharmacies and national buying clubs. You may also want to ask your physician to help you legally purchase prescription drugs from Canada, where prices are often significantly lower.
If you’re still working and your employer offers a Health Savings Account (HSA), try to take full advantage of this option. Contributions are pre-tax, and all withdrawals you make for qualified healthcare purposes are tax-free. While you can’t contribute to your HSA once you’re enrolled in Medicare, you can use the balance in your account to pay for most Medicare premiums, co-pays and other out-of-pocket expenses.
Finally, if these decisions seem overwhelming, look for help. Your state offers free counseling services to help evaluate your various Medicare options. If you’re friends with a retired nurse or doctor, see if they’re willing to serve as your healthcare advocate—and pay them for their time. And make sure you fill out a healthcare proxy form that gives someone you trust the legal authority to make healthcare decisions for you should you become physically or mentally capacitated.
The start of a new year is always a good time to take a closer look at where you are financially and figure out whether certain changes may help you boost your retirement readiness. While there are many things you can do, here are four steps you might want to move to the top of your "to consider" list.
If you and your spouse or partner make less than $150,000 (if filing jointly) or $75,000 (if filing as individuals), you should have received an economic stimulus payment ($2,400 for couples, $1,200 for individuals) that was part of last year’s COVID-19 relief legislation. In January of 2021, you should also have received an additional payment ($600 for individuals/$1,200 for couples) as part of the new relief legislation passed in December.
Many people who are approaching or in retirement are asking similar questions: What value do I offer if I no longer have a full-time job? What will I do all day? Can I afford to live the way I want do? In his new book, Shifting Gears: 50 Baby Boomers Share Their Meaningful Journeys in Retirement, author and retiree Richard Haiduck offers valuable insights into the aspirations and concerns of those who are experiencing the joys and challenges of their golden years. Most don’t plan on kicking back and doing nothing. By desire or financial necessity, many are working part-time or joining the gig economy. They continue to support the causes they believe in, through direct action and charitable giving. They’re starting new hobbies, speaking their minds, and pushing back against society’s outdated attitudes about older Americans. For many, the pandemic has not changed their retirement lifestyle at all.
The biggest worry among most of Haiduck’s interviewees is whether they’ll have enough money to live the way they want to during a retirement that could last decades. Those who are approaching retirement facing this financial uncertainty should consider working longer, delaying taking Social Security until age 70, boosting contributions to their retirement plans, and envisioning how they want to live when they retire. Many could also benefit by meeting with a fee-only fiduciary financial planner who can help them gain a full understanding of their projected income and expenses during retirement and what they may need to do now to shift as smoothly as possible into their life after work.
When you’re reviewing quarterly and year-end performance in your 401(k) and brokerage account statements, it’s important to consider how much you may be paying in annual fees (expense ratios) to mutual funds and commissions to brokers. These combined costs could be as high as 2% per year. While this may seem small, over several decades of investing, these costs could potentially reduce the value of your retirement nest egg by tens of thousands of dollars. And if you’re retired and now invest mostly in low-yielding bond funds, these costs may actually wipe out the small amount of income these funds generate each year.
It’s up to you to research how much you’re paying in investment costs, and whether less expensive options are available. For example, most mutual funds come in various share classes, each of which have different expense ratios. Shares of funds you purchase on your own may have significantly lower expense ratios than different share classes of the same funds you purchase through a broker, which may add on as much as 1% in additional “marketing” fees to pay brokerage commissions. Not to mention added “back-end” sales charges if you sell shares before a certain time period has elapsed.
If you invest on your own and you’re not a strong believer in the ability of mutual fund managers to make the best investing decisions, consider investing in index funds and ETFs that offer broadly diversified exposure to different segments of the market at a fraction of the cost of actively managed funds.
If you’re working with a broker, ask them to disclose the total annual costs of the funds they’ve sold you. If these costs seem too high, ask them to recommend cheaper alternatives that have similar characteristics and track records—but make sure you won’t have to pay back-end sales charges if you make the switch. If your broker doesn’t take your cost concerns seriously, consider firing them and hiring a fee-only fiduciary investment adviser to manage your portfolio. These professionals charge you an annual fee (which they will fully disclose) and never accept commissions from fund companies. In exchange, they’ll be able to tell you exactly how much you’re currently paying in mutual fund fees and recommend lower-cost options that align with your investment objectives and risk tolerance.
The COVID-19 pandemic has highlighted the importance of making decisions that will make it easier for others to carry out your wishes should you become physically or mentally capacitated or when you pass on. At the very least, you should assign someone you trust to serve as your health care proxy should you no longer be able to make healthcare decisions on your own. You should also formalize a living will that documents whether you want or don’t want life-prolonging treatments at the end of your life. Also consider assigning durable financial power of attorney to someone you trust to manage your finances if you’re no longer able to.
To help ensure that you, rather than a court, determines how your assets in your estate will be distributed to your heirs, make sure that you’ve completed a will that states your wishes and names an executor. Review and update your will if circumstances change. To avoid probate, consider setting up a revocable living trust and funding it with high-value assets such as your home and taxable investment accounts. You’ll need to retitle these assets in the name of the Trust. You won’t, however, need to retitle your IRA accounts and life insurance policies, since these assets will go directly to your assigned beneficiaries.
It’s highly recommended that you hire an experienced attorney to legally formalize these decisions. Since attorneys are expensive, consider working with a fee-only financial planner who can turn your decisions into an estate planning action plan at a relatively lower cost. You can then give this plan to your attorney to execute the legal requirements.
With the U.S. presidential election results finally settled, many investors are wondering how a Biden presidency may affect their portfolios next year and beyond. If the special elections in Georgia in January restore control of the Senate to the Democrats, there is a possibility that President Biden may fulfill his campaign promise to raise capital gains taxes and income and estate taxes on wealthy Americans. But the chances of all Democrats falling in line to support these hikes is unlikely while the economy is still struggling. Of far greater importance is the timing and extent of the next round of economic stimulus. Congress and the new president will need to quickly agree on a package that provides relief for the millions of Americans still out of work and for small businesses that are struggling to survive. Wall Street is already betting that the widespread availability of COVID-19 vaccinations by spring, in combination with stimulus and low interest rates, will accelerate economic growth and job creation in the second half of 2021, which is why the stock market has hit record highs recently. Yet, with so much uncertainty in the air, you should think carefully before making any major end-of-year investment decisions or discuss your concerns with an experienced fiduciary financial advisor before you act.
For years, many financial professionals have suggested that most retirees can afford to withdraw up to 4% of their retirement assets each year with very low risk of their money running out in less than 25-30 years. But this “4% rule” was created at a time when interest rates were much higher than they are today. Back then, many investors with conservative portfolios could depend more on bond income to replenish these withdrawals. Now, retirees have to allocate more money to stocks to help make up for today’s historically low bond yields. In any case, there is no “hard and fast” rule on how much money you can or should withdraw. The actual amount needs to be based on your retirement age, life expectancy, lifestyle and other sources of income. Other factors, such as whether you have long-term care insurance or whether you’re hoping to leave some of your retirement money to your heirs or favorite charities also need to be considered. If you’re struggling to deal with these complex issues, consider seeking the advice of a fee-only fiduciary financial planner, who can help you understand different retirement cashflow scenarios and recommend a strategy that may increase the chances of your retirement nest egg lasting as long as you want it to.
It’s important for your grandchildren to start building their “money-awareness” at an early age. Since schools generally don’t teach financial literacy and parents often don’t have the time or energy to discuss these matters with their kids, you can play a key role in helping your grandchildren become smarter about money. With younger children, help them understand how much of their parents’ paychecks are spent on food, clothes, mortgage payments and home repairs and taxes. Visit online retailers with them so they can see the costs of the clothes, books and toys they own or want for the holidays. Give them odd jobs that put extra money in their pockets and help them figure out how much of their earnings to reserve for saving, spending, investing and charity. For teenagers and college students, help them learn how to keep debit card spending from spiraling out of control and avoid getting trapped in credit card debt. This is also a good time to teach them the basics of investing by offering inexpensive ways for them to enter the stock market.
Why are you seeing an endless stream of commercials for Medicare providers? Because right now it’s the annual Medicare enrollment period, which ends on December 7. If you haven’t signed up for Medicare yet, you can do so several months before you turn 65 so your coverage starts on your birthday. If you’re 65 or older and have been laid off from your job and no longer have healthcare coverage, you can sign up for Medicare right away. Once you’ve enrolled, you can change your coverage during this annual fall enrollment period. The most common and puzzling decision Medicare enrollees face is what kind of coverage to get. They can enroll in standard Medicare (Part A and B) and add prescription drug (Part D) and supplemental coverage (known as Medigap). Or they can choose a comprehensive Medicare Advantage plan offered by private insurers that covers Medicare services and prescriptions. While Medicare Advantage plans often have cheaper monthly premiums, they can incur higher out-of-pocket costs and limit your choice of physicians and hospitals. Confused? Fortunately, there are resources you can use to use to compare your options and get human assistance.
With interest rates at record lows and economic uncertainty expected to continue, you’re probably wondering, like millions of other Americans, whether you’ll have enough income to last 20 or more years of retirement. Fortunately, there are a number of steps you can take right now to improve your chances. First, try to avoid taking Social Security as long as possible, since each year you delay could increase your benefits by 8%. Second, use online tools like maxmyinterest.com to find online banks offering better interest rates on savings than you’re earning now. Third, consider reallocating some of your investments to increase income without taking on excessive risk; equity-income funds offer an attractive combination of dividend income and the potential for capital growth. Fourth, look for ways to reduce non-essential spending and investment expenses. If all of this seems too overwhelming to do on your own, considering working with a fee-only fiduciary financial planner who can analyze your entire financial life and recommend a plan to help you live the way you want to during retirement.
401(k) plans are by far the largest source of income and capital for most retirees. That’s why it’s important to make sure you’re making the most of your plan’s potential by finding ways to reduce costs and make smarter investment choices. Edward Gottfried of Betterment suggests that the easiest way to lower costs is to move your money from mutual funds that charge you 1% or more in annual investment management fees into index funds with fees ranging from 0.05% to 0.25%. Online tools like Blooom can analyze all of your plan’s funds and suggest less-expensive alternatives. It’s also important to make sure that your asset allocation—your current mix of stock funds, bond funds and cash--reflects your investment goals, timeframe and risk tolerance. As you approach retirement, you may want to reduce your allocation to stocks to protect against potential losses in your portfolio should the market plummet when you need to start making withdrawals. However, it’s important to keep some exposure to stocks because they’re more likely to keep your portfolio growing faster during retirement than if you only invest in bonds and cash.
When you retire, or move to a different company, you need to decide what to do with the assets in your former employer’s 401(k) plan. If you’re switching jobs, it only makes sense to transfer assets from your old plan if your new company’s plan offers better investment options and lower costs. But for most people, moving 401(k) plan assets into a brokerage Rollover IRA makes the most sense. A Rollover IRA gives you access to thousands of different mutual funds and ETFs and most offer online retirement planning tools to help you determine an appropriate asset allocation model and select investment options. If you don’t want to make your own investment decisions, consider rolling over your 401(k) assets into an IRA professionally managed by a fee-only fiduciary investment adviser.
According to industry research, only half of retirees save enough money to maintain their current level of spending for more than five years. Trying to figure out if their income from Social Security and retirement savings will last potentially 30 years or more is one of the biggest sources of stress among those in their 60s and 70s. According to Steve Vernon, author of Don’t Go Broke at Retirement, retirees need to find a middle ground between carelessly spending away their nest eggs and allowing their fears about running out of money keep them from enjoying life. There are two strategies you can use to help ensure that you won’t spend your way into poverty. First, try to delay taking Social Security benefits until age 70 if possible, even if you need to take a part-time job to earn extra income. The longer you wait, the higher the monthly benefits you’ll receive. Second, look for ways to reduce your spending. While going out to eat less often and cutting your cable and cell phone bills can help, the most significant, long-lasting savings come from eliminating major expenses. Getting rid of a vehicle you no longer need or moving into a townhouse or to a state with a lower cost of living can significantly reduce the thousands of dollars per year you spend on repairs, loans, insurance and taxes. Since these decisions can be very complex, consider seeking the advice of an unbiased, fee-only financial planner who can recommend strategies to keep you financially and emotionally secure during your golden years.
If you’re thinking about moving to a smaller home, you may want to begin this process by figuring out what you need to keep and what you can get rid of. In this episode, David Ekerdt, a sociology professor at Kansas University and author of Downsizing: Confronting our Possessions in Later Life, reveals that many older people find this process to be a major source of tension and emotional duress, especially if they have a short timeframe for getting rid of things. Often their children and grandchildren aren’t interested in taking their china, silverware or furniture. Or no wants to buy the collectibles and artwork they thought would bring in a small fortune. Or the charities they’d like to donate things to are overly picky. A process that they thought would be done quickly can sometimes takes months. To lessen this stress, parents should invite their children to either “claim” or take items they want long before they plan to move to a different location. The earlier they shed the things they no longer need, the less they’ll have to deal with later on.
Scammers, identity thieves and false unemployment claim filers have stolen hundreds of millions of dollars this year, taking advantage of COVID-19 confusion to prey on vulnerable and scared people isolated in their homes. Some call pretending to be the Social Security Administration, demanding personal financial information to stop benefit cuts. Others pretend to be from the federal government, asking people to provide their Social Security numbers to authorize economic stimulus payments. Other scammers send solicitations from fake charities or GoFundMe campaigns claiming to be helping first responders and pandemic victims. If you receive unsolicited calls, texts or emails asking for your Social Security number or other financial information, ignore them. If you inadvertently fall for one of these scams, or you believe that you are a victim of identity theft, immediately contact the three credit reporting agencies, Equifax, Experian and Transunion, and request a credit freeze, which will prevent thieves from opening more credit cards in your name. Also request a free credit report from each agency and look them over closely to identify any credit cards or loans you didn’t authorize. If you believe that someone is filing false unemployment claims under your name, contact your local state employment office or contact the FBI at 1-800-CALL-FBI or www.tips.fbi.gov. Make sure you document your attempts to research this fraud.
Going through a divorce is tough at any age, but it can be particularly challenging when you separate over age 55, when your emotional and financial lives may have been intertwined for decades. In this episode, Pam, Richard and Terry discuss the three most expensive financial mistakes people going through a divorce often make. They also offer tips for reducing legal costs, outline the steps spouses need to take to understand the joint assets they’re entitled to and the debts they may be responsible for, and discuss ways to get through the rigors of divorce and emerge with a positive outlook and a strong sense of financial independence.
The COVID-19 pandemic has created dilemmas that college students and their parents have never had to face before. With many already financially struggling higher education institutions keeping campuses closed, cancelling athletic seasons and offering online courses only, students are being denied the full college experience. Are the 10%-15% tuition reductions some colleges and universities are offering adequate compensation? Pam, Richard and Terry discuss the pros and cons of various options, including: Negotiating tuition costs and financial aid packages; taking a gap year to earn money for the 2021-2022 school year; and deferring enrollment and earning a 1-2 years’ worth of transferable credits at a community college.
For centuries, gold has been considered a store of wealth. For some investors, this belief may be stronger than ever before, as gold prices have reached record highs recently, driven largely by its reputation as a hedge against market volatility and concerns over the safety of global currencies. Yet it’s important to remember that while gold is doing well now, as an asset class it has significantly underperformed the S&P 500 over the past decade. That’s why most advisors recommend that investors allocate no more than 15% of their portfolio to gold. What’s the best way to get into the gold market? Pam, Richard and Terry weigh in on the pros and cons of investing in physical gold like coins and bullion, versus ETFs and mutual funds that invest directly in gold and funds that invest in mining companies that fulfill the global demand for this precious metal.
We're now halfway through what's become a very strange year. The turmoil we started experiencing inthe financial markets may be making you more than a little jittery about your finances. So in today’s Friends Talk Money episode, we're back to help you make informed money decisions. This episode is your midyear financial checkup that includes suggestions for things to do to stay on track – or at least get a start on it. We'll also talk about finding work and doing some volunteering virtually
We may have seen the worst from the Coronavirus pandemic that shut down businesses across America. Now we have to manage, save, and invest our money in a brand new environment. With savings rates near zero and stock prices once again looking expensive, and therefore potentially risky, retirement investors are wondering how to put their savings to work and figure out how to fill any gaps in income. In this second special edition of Friends Talk Money, Richard talks employment opportunities for people over 50, Terry provides a crisp summary of what’s happening in our economy, and Pam offers those nearing retirement three tips about investing for both income and growth.
The Coronavirus pandemic has created an unprecedented global healthcare, economic and personal financial crisis. The risks are magnified for those approaching retirement, who face a higher risk of infection, loss of income, and a steep drop in the value of their retirement savings. In this special edition of Friends Talk Money, Richard, Pam and Terry serve up advice and insights about what’s going on with stimulus checks, and how to stay solvent and avoid making bad decisions during these trying times.
Some blunders or missteps are more expensive than others. Guest expert, Travis Iles, Texas Securities Commissioner, Travis Iles joins in to offer eye-opening advice. Terry, Richard and Pam bring their own experiences to the discussion and explain how to save yourself from making these truly fatel money mistakes.
The day of retirement is the day of reckoning. Now you need a reliable stream of income, as well as a more conservative investment plan. How can you make sure you don’t run out of money before you run out of life? We talk about the smart way to generate income, without elevating risk, during retirement.
Journalist and author Chris Farrell and Ohio State University professor Stephanie Moulton discuss the rising amount of debt held be America's retired population and concerns about how debt can hinder retirement. They also review findings from a study Moulton and colleagues did to see which types of debt are the most stressful for retirees and why.
Annuities are touted as the be-all-end-all answer for retirees looking to generate guaranteed income for the rest of their lives. But annuities are making headlines for all the wrong reasons now because many are downright dangerous to your wealth. Fiduciary advisor, Eric Lai sets the record straight. He explains how aggressive sales people peddle annuities, and how consumers of all ages are getting burned.
If you want to spend the rest of your life in your family home or condo, a Reverse Mortgage could give you a tax-free stream of income out of the equity you built up in your home over the years. And no matter how long you live there, you’ll never run out of money. When you move out, or die, you (or your heirs) can never owe more than the home is worth. But there are critical details you must understand before you enter into this deal.
Elder fraud is an epidemic -- Hazel Heckers, victim advocate for the Colorado Bureau of Investigation, discusses the latest types of elder fraud, why people fall for the scams and how older adults can avoid becoming victims. She also tells people in their 50s and 60s what they can do to help protect their parents from elder fraud.
Meet one feisty 75-year old woman who is redefining retirement. Her empowering message may change people’s lives and how they think about retirement. Retirement research expert, Warren Cormier explains the different phases of retirement. Working past 70 is now the ‘new normal’.
Someone turning age 65 today has almost a 70% chance of needing some type of long-term care services. None of us wants to think about not being able to dress or shower on our own. Even worse, the cost of getting help with those basic services could devastate not only your retirement plans, but impact your entire family. Terry, Richard and Pam cut through the noise to help you understand the pro’s and con’s.
Cindy Hounsell, the founder and president of WISER (The Women's Institute for a Secure Retirement) discusses the challenges women face having a secure, comfortable retirement. She also offers advice to help women maximize their income in retirement, including getting the most they deserve from Social Security.
A retired couple from Chicago sign up for an investment class at a local college and learn a whole different lesson about financial advisors. Lynne Egan, a securities regulator and Phyllis Borzi, the architect of the ‘Fiduciary Rule’ talk openly about financial advisors and how to become educated to protect yourself from sleazy practices.