Financial Planning

As a Child-Free Elder, Who Will Be On Your Team?

“Who will take care of you when you’re old?” someone once asked me when I told her I had no children.

It seemed like an old-fashioned kind of question. Nevertheless, it caused a mini panic attack.

Knowing the statistics, I had made the vague assumption that I would need to make arrangements for care, but something about her question made that statistical probability more real.

About 14 percent of 40- to 44-year-old women had no children in 2018 – up from about 10 percent in 1980, U.S. Census data shows. This is and will be an issue for millions of Americans.

As anyone who has served as a caregiver knows, there are four main questions to ask from the beginning. Answering these can lead to the formation of an elder care support team. The team members may come from two areas – friends and family, professionals, or both.

  • Where will I live?
  • Who will make medical decisions for me?
  • Who will handle my finances?
  • How will I get transportation?

Team Member 1: Where will I live?

The first part of figuring out the team is to know where you will be living. The vast majority of Americans want to age in their homes. For some people that home might be the place they have lived for several decades. If so, then the team member will likely be a home health care company.

For others, home might be a place they move to – with a supportive community, but not a facility (perhaps at first). If that’s you, building a network of friends and professionals in the community can be one of the best ways to reinforce your support team.

Although it’s not in many people’s plans, sometimes aging at home isn’t an option. For people aging without children, it’s more important to get to know assisted living and continuing care facilities, and figure out how you would pay for them. (For myself, I purchased a traditional long-term care policy. But that doesn’t mean that is the right solution for everyone.)

Team Member 2: Who will make medical decisions for me if I can’t?

Preferably someone close by. Ideally this person could be available at a moment’s notice and will not have to travel far to attend appointments with you.

Having a strong primary care physician relationship is also highly beneficial. Some doctors, especially those who specialize in concierge medicine, can and will serve as your legal health care surrogate.

Team Member 3: Who will handle my financial affairs?

Many attorneys recommend having a different person named for financial matters than for health care decisions. As aging progresses, it’s a lot to ask of one person to handle bill paying, money management, and doctor appointments (as anyone who has served as a sole caregiver can attest).

Money management involves several duties. To name a few,

  • Paying bills and making renewal decisions (such as memberships, subscriptions, and/or insurance policies)
  • Making gifts
  • Making transfers between accounts, such as taking IRA withdrawals
  • Managing investments

Your financial team might involve two members – someone who does the day-to-day management, plus a professional investment manager. Most professional investment managers do not provide billpaying and cash flow management. Professional investment managers may charge a fee that is a percentage of the amount they manager, or a flat fee. If a friend or family member is taking over the day-to-day, it’s important to pay that person a fair fee, too.

Or you can find a fiduciary who will cover it all. Trust companies are one example of fiduciaries who will handle all financial duties if they are named as trustee or co-trustee on your documents.

My choice for now is an independent fiduciary. She happens to have a law degree and serves in this capacity full-time. Her services won’t begin unless I’m alone and losing the ability to handle things myself. Hopefully that’s a very long time from now, if ever.

Team Member 4: How will I get transportation?

If you move to a community with many transportation alternatives, you might not need a separate team member for transportation. This is my goal – a walkable community with good public transportation alternatives. The EPA even publishes a National Walkability Index.

But if you are staying in a home or community without many alternatives to your own car, and you don’t want to use ridesharing with strangers like Uber or Lyft, you could assemble a network of friends and acquaintances on whom to rely. So together they will be your transportation team member.

How can I make my affairs easier to manage for the team?

Consolidate and simplify with one financial institution. It will be far easier for your financial surrogate, and the institution may even show you some extra appreciation. Some people are concerned that this is not being “diversified.” Nowadays, most institutions can hold a diversity of cash and investments all under the same roof. Just make sure to keep under the FDIC limit in any bank accounts.

Use the health apps provided by your healthcare providers to give easy access to your electronic medical records.

Have all of your digital passwords in one digital password manager. Most people don’t realize they have on average over 200 accounts with passwords. See “Document Your Digital Assets.”

How do I make it all legal?

Once you have decided who you would like to name as your surrogates, have either a durable power of attorney (DPOA) or living trust drafted by a board-certified estate planning attorney. (See “Do I need a trust?” for more on the topic of trusts.) The same attorney will often also draft your living will and healthcare power of attorney, too. For qualified attorney recommendations, check for your local chapter members of the National Association of Estate Planning Councils.

For more information on planning for aging, check out the e-book, How Does Your Money Flow? A Guide to Common Saving, Spending, and Sharing Decisions (Porchview Publishing, $3.99, available in e-reader-friendly formats). Or, join the list for our free award-winning monthly e-letter, “The View From the Porch.”

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How To Let Go of Money Self-Doubt

blank stare or self-doubt emoji

How to let go of money self-doubt:

What is money self-doubt

Money self-doubt is an inner belief that one cannot trust themselves with a decision about money.

Sometimes these beliefs operate in the background, quietly driving decisions when we don’t realize it.

Other times they’re front and center.

What does money self-doubt sound like?

Money self-doubt beliefs often sound like critical messages:

  • “I knew I’d screw it up.”
  • “I’ll never be good with money.”
  • “If I can’t manage my own finances, I’m a failure.”  
  • “Why am I so stupid with money?”

Money Self-Doubt Origins

Where does money self-doubt come from? 

It could be a single traumatic event or a repetition of harmful moments that lead to flawed beliefs about our financial capabilities. One time being taken by a scammer, or many times being told by an abuser we aren’t capable.

Without counterbalancing mantras like,

  • “You’re still OK.”
  • “You just made a mistake.”
  • “You can do this.”

the self-doubt can take hold.

Society and media also don’t help, offering a choice of money self-image as either, “good with money,” or not. Individual instruction is rarely given in school, or in families, much to our society’s detriment. While financial professionals are often proficient in finance, many are not good educators. A few even try to make money more complex than it is, to keep clients feeling less than sure about themselves.

Case Study: Sondra (not her real name) is a highly educated and accomplished professional. Her parents came from Depression-era families where money was tight in their younger years. Money was never talked about in Sondra’s home, although she was given everything she needed. She grew up with the belief that her parents didn’t discuss it with her because they believed money was something she was not capable of handling. When she went to talk with a financial advisor, he threw so much jargon at her that she was too uncomfortable to admit she didn’t understand what he was talking about.

Money Self-Doubt Results

Without realizing these beliefs exist, we can allow them to influence what actions we take or fail to take. Self-doubt can affect who we allow into our lives, and who we don’t. It can affect our choice of career. Or how we spend, or choose not to, on our own needs, wants, and wishes. Ironically, money self-doubt can lead to overspending with some people, and over-deprivation with others.

Sondra chose a career where she was assured a salary and the chance of a bonus if she worked hard enough. She worked longer hours than she wanted to. She lived minimally, foregoing many comforts and rewards of her hard work. Her dreams of having more work-life balance were put on hold because she never felt financially secure. In her personal life, she chose friends and partners who also didn’t talk about money, leaving a gap in her closest relationships.

How To Let Go of Money Self-Doubt

If you’ve been operating under flawed assumptions, and now you know it, you’ve taken the first step to reset your relationship with money.

What else can you do? Here are 4 suggestions:

1) Be aware of body messages. Self-doubt, sometimes manifesting as shame, has a feeling to it. It might be tightness in the chest, throat construction, shortness of breath, nausea or butterflies. Instead of trying to get rid of the feeling, breathe through it and name it: “I am feeling shame/doubt about a money issue.” Redirect your thoughts to positive truths: You are smart. You are capable. You know how to ask for help. This is something you can handle.

2) Ask yourself a simple question: “Is this true?”

For example if you have a belief that “I’ll never be good with money,” and you had to prove that in a court of law, what evidence do you have? Sometimes asking this question can be one way to help our brain separate facts from fictional beliefs.

3) Call someone supportive to talk about your feelings. (But make sure they truly are supportive.) If you’d like professional help specifically about money psychology, check out the Financial Therapy Association.

4) Become aware of those in your life who are too willing to reinforce doubt-based messages – family members, partners, friends, or even (especially) financial professionals. Instead, seek the company of those who say, “I am confident you can handle this,” and will walk alongside you, not put themselves ahead or above you.

After talking with a friend, Sondra decided to educate herself about money. She began to read books that explained things simply, and take online courses that took a simple approach. Patiently, she interviewed many financial professionals. The more she talked about money, the more confident she became. In the end, she found someone who prioritized her financial education and independence. She began to feel more secure, and gained the courage to consider a daring career move.

The Gift of Letting Go

Letting go of money self-doubt can be one of the greatest gifts we give ourselves to reach peace and security about our financial future.

For more on unspoken money messages see Chapters 2 and 3 of The Mindful Money Mentality: How to Find Balance in Your Financial Future, or this 5-minute video with mental health counselor Ken Donaldson on Money Shame.

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A CFP® Who Bounced Her IRS Check

A CFP® who bounced her IRS check. That would be me.

Yes, I wrote a bad check to the IRS.

Accidentally, of course, but still. Behind my name are the initials “CFP,” for Certified Financial Planner™, so supposedly I’m some kind of financial expert. And yet, I did a very un-expert thing that even most financial un-experts do not do.

Brain Fog

The bad check was written in April 2014. The tax year in question was 2013, which was the same year I got an unexpected biopsy (which came out clean after several weeks), an unexpected audit by state regulators (which came out clean after several weeks), and an unexpected divorce (which came out after several weeks and much of it wasn’t clean). All of these – the biopsy, the audit, and the unexpected divorce – happened between August and November.

If you’ve ever been through one or more of the above, perhaps you can relate to the feeling of going through the rollercoaster of life, trying to act like a rational person, but getting hijacked by emotions. Wishing you could concentrate better, focus like you used to, but the brain just won’t cooperate. I wasn’t aware I was in that much of a fog. I thought I was keeping it all together pretty well, considering.

Until the IRS notice showed up.

“Check Payment Not Accepted By Bank: The bank did not accept the enclosed check for the following reason: INSUFFICIENT FUNDS. Please return the bottom portion of this form with a certified check…The PENALTY amount is…The current Interest Charge is...”

Shock and Shame

“Wut?” I thought.

My first reaction was to get mad at the bank. It only took a few minutes, though, to research there was no mistake. Shock, embarrassment, humiliation, shame. My jaw and knees dropped to the floor simultaneously.

I bounced a check to the IRS?!?

That’s when it dawned on me that the events of 2013 were still affecting me or I wouldn’t have written a check on one of my new post-divorce checking accounts without putting any money in it first.

So, the next paragraph caught my eye.

“You can request penalty relief by explaining why you believed the bank would accept the Check and by providing any supporting evidence.”

My backbone straightened up. Although it was not the bank’s error, I needed to plead my case to keep my sanity.

Making the Case for Penalty Relief

It turns out the IRS will seriously consider applications for relief, although that doesn’t mean they will blanketly grant them.

First, I immediately deposited more money in the account and had the cashier’s check, including the penalty and interest, sent.

Then, I sat down to write to the human being who would be reading my request. I crossed my fingers that it would be a 40- or 50-something who had been jilted in a 20+ year marriage. There are quite a few of us out there, and maybe even a few who work for the IRS. I fell on my sword, admitting the mistake, and explaining temporary loss of rational thinking.

The bottom line is that I got a partial waiver.

The main point, however, is that I refused to let the IRS add to my stress. The notice was a wake-up call that I was under more stress than I knew, and I made a conscious decision not to add to it.

Correspondending with the IRS

My letter was dated May 22, 2014:

“I am writing for penalty relief….the bank did not make a mistake. I made the mistake. At the end of 2013 I was suddenly divorced after a 26 year marriage. Perhaps if the person reading this has ever been through such an experience, you might understand that in getting situated with my new life, including my finances, I have made a few absent-minded mistakes I would not normally make. In this case I forgot to fund my new checking account.

As requested by your notice of April 29, 2014, I have sent a cashier’s check for the entire amount due including penalties and interest.. I hope the IRS will examine my history of prompt payment for 30+ years and consider this in your determination for relief.”

On May 26, 2014 I received a notice which said:

“You have unpaid taxes for 2013” which showed the amount due, plus the following:

“Failure to pay proper estimated tax penalty – $58.00

Dishonored payment penalty – $65.54

Failure-to-pay penalty – $32.19

Interest charges – $10.87“

Because they had cashed my cashier’s check by then, I decided to wait. Maybe they hadn’t read my letter yet.

On June 12, 2014:

“Thank you for your inquiry dated May 22. We have accepted your explanation of why the bank didn’t accept your check…and we removed the penalty.”

Whew, ok. Sigh of relief. Will they actually refund the penalties, or what? Again I decided to wait.

On July 2, 2014:

“We received one of the following items from you on May 27, 2014…We’re working on your account…we need an additional 45 days to let you know what action we are taking… You don’t need to take any further action now…“

Wut? What did this mean? I thought I was ok, and now they are thinking about it? Again, because I excel at going down worry rabbit holes, I put it aside.

On July 18, 2014:

“Thank you for your recent letter dated May 22 that asked us to remove the penalty for failure to pay…We are pleased to inform you that your request to remove the penalty.. has been granted. However, this action has been taken based solely on the fact that you have a good history of timely filing and timely paying. This type of penalty removal is a one-time consideration….”

The final notice, on August 4

“Changes to your 2013 Form 1040: Decrease in failure-to-pay penalty. You are due a refund of $32.19.”

So, I didn’t get all the other fees/penalties waived. No sympathy for the divorce part, but appreciation for the 30+ years of paying on time.

Well, by then it didn’t matter anymore. I had advocated for myself and received a compromise. It wasn’t worth another minute of worry or effort. Heck, I was just glad I hadn’t bounced checks to anyone else that year.

The Bottom Line

Nearly all of us will have a time in our lives when our brains get discombobulated – divorce, death, health issue, job loss, new baby, relocating, and/or retirement. When we mess up, it’s important to let our minds rest, go easy on ourselves, and be strong enough to ask for help and forgiveness. Even financial “experts” make head-slapping mistakes.

And sometimes, even the IRS respects that.

For more mistakes I made so you don’t have to, subscribe to the award-winning monthly e-letter, “The View from the Porch,” or see the book, The Mindful Money Mentality: How to Find Balance in your Financial Future.

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What Is Retired Husband Syndrome?

What is retired husband syndrome?

I first heard of Retired Husband Syndrome (RHS) at a book signing in 2013. From across the book section in the exhibit hall, I saw a young man with jet black hair staring at the back of my newly-published book, The Mindful Money Mentality: How to Find Balance in Your Financial Future. He turned it over, opened to the table of contents, flipped a few pages, and turned it over again.

Until that point, he acted like other book-browsers – look at back, flip to front, open to table of contents, flip to back, flip again. Some would then take the book to the register. Others set it back on the shelf. The whole decision took less than 2 minutes.

But this young man took so long reading, I wondered if he might consume the whole book right there. Then I quit watching, distracted by conversation with another attendee.

When I turned back to look for him, he was gone. Figuring he had decided against it, I was surprised a couple of hours later to see he was the first in line at the book signing.

Retired Husband Syndrome – in South Korea

Approaching with an enthusiastic smile, he said “Hello” in a heavy Asian accent. He was from Seoul, South Korea, and said that he thought my book would be helpful to his male clients. Unsure why he was excluding the female ones, I readied my pen to sign, but asked him to tell me more.

“In Asia, we have Retired Husband Syndrome (RHS),” he said.

“I’ve never heard of that. What is it?” I asked, putting the pen down.

“Some husbands spend their whole lives working for a company, and when they retire, they are at home, and it is not good for the marriage. The husband loses his identity because he is not in his job anymore, and he wants to be home with his wife. The wife has been at home her whole life, but she doesn’t like the husband being there, doing nothing.”

“So sometimes the retired husbands do…nothing? They don’t have hobbies or hang out with their friends?”

“Yes, that’s right.”

“Wow. So you must see a lot of marriage problems in your practice?”

“Yes! And it is too bad. They have a pension, but the couples never spend time planning what they will do.” He explained more about the strain on the marriage; the sadness he sees at a time when there could be great joy and celebration; and the effect on their children and the families.

“This makes me sad. Sometimes I am going to be the only person outside of the family who might see it. All of the financial advisors in Seoul could help people with this. This is preventable.”

Retirement Planning Is About More Than Money

I once heard a conference speaker say, “We spend more time planning what we’re going to eat for lunch than how we will spend a 30-year period of our lives.” In the U.S., it’s not only pre-retiree husbands, but also wives, singles, straight, and LGBT pre-retirees, admitting they are at risk for something like RHS.

It helps to clarify how you might spend the bounty of time that increased longevity will likely bring. If you need help planning a fulfilling retirement, find a financial professional or coach who takes as much interest in your time as they do in your money.

You can help stop the spread of one type of preventable international syndrome, and help your future happiness even more.

For more on the psychology of money prior to retirement, tax tips, and a monthly dose of fun, enjoy the free award-winning e-letter, “The View From the Porch.” Subscribe at this link: https://bit.ly/3t2uwfn

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NOW I Get It: 5 Lessons From Disaster Checklists

storm

Like many in Florida this time of hurricane season, I am remembering the not-so-distant past experience with Hurricane Irma. Below are 5 lessons from disaster checklists.

In that year, I thought I was prepared with a set of handy checklists. But in my Monday morning quarterbacking after that storm, there were areas where I did something right, intentionally or not, and others where I got to say, “Oh. NOW I get it.” I am a lifelong Floridian. I’ve been through hurricanes. Further, I love camping and have been doing it since I was little. But I take more time preparing for camping trips than I did for Irma.

All the official checklist advice didn’t sink in until I got a taste of the real deal.

Irma was a huge pain and inconvenience for several weeks, but in my immediate area no lives were lost or in imminent danger. I realize now, though, how unprepared I was if it had gone differently. With no property damage or bodily injury, I was given a chance to do a better preparation job next time.

So as we stare down another storm season and other climatic catastrophes, below are five lessons I didn’t expect to learn from Irma.

Checklist Confusion

What I Thought I Did Right: When Irma was one week out, I dug up the checklists and took inventory. But I became confused. One list was for evacuating the state, one was for staying at home, and another was for going to a shelter or friend’s home. I never thought I wouldn’t know which it was going to be. With a 92-year-old mother-in-law, leaving was not a simple option. Neither was staying. As we debated for five days before it hit, I bounced between the checklists, creating triple the preparation anxiety.

NOW I Get It: This could have been avoided with a kit prepared in advance for each option.

Lesson #1: If you are evacuating, and especially going to a friend’s house or shelter, the time to go is not 24 hours before the eye arrives. By then, or even 2 days before, the 50 mph wind and flooding rain has already begun. Once tree branches start flying across the highway (gee, that does happen before the eye arrives), all the stores are closed and you can’t go home for more canned soup, batteries or underwear.

Lesson #2: Prepare the kits. Decide early on (like, 5 days out) to stay or go, and stick with it.

Flashlights and Batteries

What I Did Right: All the checklists say, of course, “flashlights and batteries.” In preparation, I dug up as many flashlights as I could find. I checked the batteries. I replaced the batteries in the ones that didn’t work. The worst of the storm was to come at night, so before bed, I placed one on my bedside table and one on the kitchen counter underneath the light switch.

NOW I Get It #1: Unfortunately I waited until the day before the hurricane to check the flashlights. We were low on batteries. Batteries were gone from the store shelves five days before that. Oh, duh.

NOW I Get It #2: When I thought about needing a flashlight, I imagined the times when power has gone out before. I imagined it would be a handy supplement to dim natural light.

What actually happened was the power went out at night. The clouds were too thick for moonlight or stars. Of course, there were also no street lights. It was truly dark, windy, and scary.

Inside, hurricane shutters blocked out any sliver of light there might have been otherwise. My house was a cave. I could not see my hand in front of my face. The flashlight was an absolute necessity, not a helpful little handy supplement. I could have used one for each room in the house. Maybe two.

Lesson #3: Change checklist to “Several flashlights.” Put on calendar on June 1: “Check flashlights, flashlight batteries and battery supply.” There’s usually a sales tax holiday in Florida that week anyway. Best time to stock up.

Food and Clothing

What I Thought I Did Right: The checklists say to have three days of food and clothing. I planned ahead for having three days of healthy food for three people. On the last day before, we realized we hadn’t checked the propane so we could cook the food. By then, propane was all sold out. We ended up cooking on a small charcoal grill. Not ideal.

NOW I Get It #1: I didn’t quite understand why three days of food and clothing were needed, especially if we stayed home. It had been too long (2005) since I had gone several days without power. 48 hours after the storm, it felt like a race against time to eat or cook the food in the fridge before it spoiled. Also, in Florida when there’s no fans or A/C after a hurricane, you sweat a lot. Ick.

On Day 3 my mother-in-law’s ALF got power so then, we did evacuate. We left to a hotel for 4 more days until our house got power restored. If we had evacuated before the storm and not been able to return, we would definitely have needed more food and clothing.

Lesson #4: Have 3 days of food and clothing packed just in case. Maybe 5.

On Your Own

One of my checklists says, “After an emergency, you may need to survive on your own for several days.”

What I Did Right: Food and flashlights. That’s about it.

NOW I Get It #1: When I read the above sentence, I thought, “On our own? That can’t mean the suburbs. That’s for people in the country.” Now I realize we were lucky our county had generators to run water and sewer services for 500,000 people for several days. Otherwise, we could have been, yeah, on our own. (Hola, Puerto Rico. I see you.)

NOW I Get It #2: Now I recognize that just because the storm is over doesn’t mean you can get home. After the eye passed and the sun was out again, 60 mph winds on Irma’s backside took down huge trees that blocked our street. It took neighbors with chainsaws a couple of days to clear them so cars could get through.

NOW I Get It #3: We had been in our neighborhood about a year when Irma hit. We had met the neighbors, had them over for Superbowl, and waved as we were coming and going. We knew them, sort of, but had no idea how much we would come together in a crisis. I did not think of counting on my neighbors, nor did I give a thought to them counting on me.

But as Irma’s track got clearer, we formed a texting group, including a young couple who moved in the week prior. We checked in as soon as the sun came up. One shared their freezer operating on a generator. Others immediately helped cut and clear fallen trees. We shared our stories and asked how we could help each other. As long as I live here, I know I will not have to survive “on my own.” We will be helping each other.

Lesson #5: There are many little lessons from Irma that I can recount, but this last one was the big V-8, SMH moment. We are not all “on our own” if we have a community. I am lucky to be part of a caring community that pulled together, whether it was unlucky tree karma in your yard or failing to buy batteries and propane in time. When I hear the same old story on the news from a natural disaster, “We all pulled together,” “This is a community who cares,” NOW I know what that kind of community feels like. I feel very fortunate about that.

Still, I will do a better job taking care of my needs so I can be better prepared next time to take care of others.

NOW, I get it.

Need a checklist? Here’s Pinellas County’s Emergency Management page.

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Death By A Thousand Indecisions

indecisions

“Then indecision brings its own delays, And days are lost lamenting over lost days. Are you in earnest? Seize this very minute; What you can do, or dream you can do, begin it; Boldness has genius, power and magic in it.”

Johann Wolfgang von Goethe, Faust

Death by a thousand indecisions. As Goethe asked, are you “in earnest”? When it comes to decisionmaking, sometimes it’s quick: Ready-Fire-Aim. With other decisions, we take our sweet time. How much is indecision costing you?

Like death from a thousand cuts, indecisions can slowly deplete our energy, leaving little behind for ourselves or others.

Decisions are Draining

That’s because decisions are draining. Neuropsychologists like Dr. Moira Somers tell us that decisionmaking depletes our mental energy. According to Dr. Somers, every day we wake up with a finite amount of mental energy. As the day goes by, the more decisions we make, the less energy we have. And the bigger they are, the more energy they use.

Think about life’s transitions. One reason transition times, good or sad, are so stressful and exhausting – a move, a death, retirement, a child, a divorce – is the many seemingly small, plus a few momentous, decisions.

Further, lack of sleep, hunger, grief or even excitement can start the whole day off depleted.

Then, every indecision we “make” is a decision. In fact, a pattern of indecisions can take physical form, and stress us out every time we see it.

What does not-deciding look like? A pile of unfiled papers. Empty boxes stacked in the garage. The “miscellaneous drawer” in the kitchen. The “junk room.” Scattered financial accounts in too many places. Unfinished projects.

With a finite amount of mental energy at hand, who can blame any of us for having some kind of to-be-decided pile/stack/assortment hanging over us all the time?

Dealing with Indecision

What to do about it?

  • Make big decisions in the morning, before depletion sets in.
  • Automate it: Use a system to take care of small decisions automatically
  • Eliminate it: Ask often, “How important is it?”
  • Date-Activate it: Calendar the decision to deal with and be done
  • Delegate it: Ask for help

Automate It

An automation example I love and have yet to implement is the decision of what to wear. Michael Kitces, a noted financial expert, famously has a closet full of the same blue shirts, pants, and shoes. One less decision each day for a busy guy.

Another example is cooking. Thanks to Cassy Joy Garcia’s book, Cook Once: Eat All Week, our household now pre-preps ingredients on Sunday. Then, each work night is 15-30 minutes to assemble and cook the ingredients with pre-planned healthy recipes. The meals are delicious, but the best part is not having to make the decision of what’s for dinner. Hallelujah.

Eliminate It

In the summer of 2021 I began thinking about a new car. My financial plan called for me to sell my would-be 7 year old car in January 2022 and buy another one. I couldn’t decide what kind of car to buy.

Aware that the indecision was draining me, I wondered why I was having such a hard time deciding. Then it hit me. I didn’t need a new car. In fact, I didn’t need a car at all. My husband and I had both switched to working from home. Why did I need a shiny hunk of metal to sit in the garage? We had my husband’s car, which was only 2 years old. We ran a 6 week experiment without using my car to see if it caused any problems.

When we saw that it didn’t, I felt immense relief. This told me I was making the right decision. Besides, it was a good time to sell a used car. $15,000 later, we are both very happy about eliminating that decision!

Date-Activate It

My calendar rules my life. It tells me what to do, where, and when. If this is not you, then this tip might not work.

One decision that goes on the calendar every year is whether to take a ski trip and if so, where. The local ski clubs publish their trips around August/September. Ski season pass discounts usually end on Labor Day. So I have the calendar marked for that timeframe to do my research, poll my skiing girlfriends, and make the decision. While it feels sooner in the season than I would like to make a commitment, if I did not give myself a deadline, I would dilly dally into December as all of the good trips filled up. And in the meantime, I would be spending a huge amount of mental energy on something that’s supposed to be fun.

Delegate It

Part of my indecision problem has been the flawed belief that I should be able to do everything myself (and perfectly, which is a topic for another blog post).

However, after a divorce, when my brain was extra foggy, I had significant success with hiring a friend to help organize. At the same time, I had estate planning documents updated with a local attorney. With my friend’s insight, coordination, and diligence, I quickly had an uber-organized office AND an updated “emergency box.” I felt the fog lifting as things came together.

It turns out that hiring help accelerated my decision making and used less energy. Perhaps this is what Goethe meant by the boldness in beginning. Delegating to others can be bold.

Getting Better and Better

Goethe said in that boldness to begin the decision we find genius, power, and magic. Further, there is a spiraling effect – the fewer decisions left to make, the more time to do what we do best. This is far better than a daily slog through indecision-infused mud.

At some point, with excess energy, I felt ready to give back. Someone close to me suddenly lost her husband and her mother within a three month period. She had an overwhelming number of decisions to make about seemingly small stuff, and was in a grief-stricken state to be doing so. I feIt the capacity to help her. I could not have made that statement before I had my own house in order. I don’t know if that counts as genius, power, and magic, but it felt really good to do.

What About You?

What if you took an indecision pile and automated, eliminated, date-activated, or delegated?

Who might you then be able to help?

Genius, power, and magic are waiting, if we have the boldness to begin.

Continue ReadingDeath By A Thousand Indecisions

Student Loan Forgiveness 2022? 6 Questions To Ask

Student loan forgiveness 2022? Where do your student loans stand right now? It can be pretty confusing to figure that out. Covid deferrals, loan servicer mistakes, and now forgiveness have led to a mish-mash of options. However, the big financial mistake you can make is to assume you don’t qualify for some kind of relief.

One piece of good news on the mish-mash front, especially if you have more than one loan: Those loans can now be seen on one page at www.studentaid.gov. No more checking on each servicer’s website for your information. It has a helpful feature. The site divides your loans into those that can be forgiven (through any existing forgiveness program, not only the most recent one), and those that cannot (mostly private loans).

To use studentaid.gov, you will need an FSA ID. This is different from your loan number. Apply for one at the website, and you’re in.

6 Questions to Ask Yourself

Before deciding, like Seinfeld’s Soup Nazi, “No forgiveness for you,” (90s reference – might make no sense to recent graduates), ask yourself these 6 questions to start:

1) Were your loan payments ever on some kind of income-driven repayment plan (IDR)? If so or you are not sure, see “Income-Driven Repayment Loans,” below.
2) Have you worked in medicine, education, or for government, at all since graduation? You may have been given bad advice about Public Service Loan Forgiveness. Skip to “Public Service Loan Forgiveness,” below.
3) Does your employer offer any type of student loan reimbursement benefit? If not, might they consider one? It’s tax-free to both you and them until 12/31/25. For more info, see “Tax-Free Student Loan Reimbursement,” below.
4) Did you repay some or all of your Covid-deferred loans in the last 33 months despite the fact they were on deferral? Skip to – “Forgiveness – What We Know So Far,” below.
5) Is your household Adjusted Gross Income (look on your tax return or ask your CPA or CFP) less than $125K (single) or $250K (married)? Skip to – “Forgiveness – What We Know So Far,” below
6) If you are a parent of a current student getting loans, is your household Adjusted Gross Income (look on your tax return or ask your CPA or CFP) less than $125K (single) or $250K (married)? Skip to – “Forgiveness – What We Know So Far,” below

Income-Driven Repayment Loans

If your loan payments were ever calculated based on your income, you may be entitled to some relief. Many errors were made in the calculations of those payments, mostly in the loan servicers’ favor. Most of those errors have now been corrected. You may owe less than you think. You may also qualify for lower payments.

Go to student aid.gov, sign up for an FSA ID, and find out.

Public Service Loan Forgiveness

A study showed that nearly all applications for PSLF had been rejected over the past several years when many of them should have been approved. Additionally the loans suffered from accounting errors.

Plus, more jobs have now been added to the PSLF program eligibility.

****But in order to have your case reviewed, you have to enroll at the student aid.gov site by getting an FSA ID by 10/31/22.****

Anyone in medicine, education or government work should go ahead and enroll. Enrolling sooner than later will reduce the chance of getting caught up in a last-minute rush of applicants.

Tax-Free Student Loan Reimbursement

With the 2017 Tax Act, employers and employees were given a special benefit. Employers can reimburse employee’s student loans up to $5250 (but any tuition directly reimbursed is subtracted first). The employers get to deduct the compensation, and the employee doesn’t pay tax on it. This benefit is available regardless of salary, income, or occupation.

Because the 2017 Act sunsets in 2026, however, this means that this benefit is only available until 12/31/25, unless it’s extended by Congress.

Ask your employer if this benefit is available to you. If you work for a small-ish employer, that employer may not be aware of this benefit. Given the tight labor market, it might be a good time to make the request to add it, or to provide it for you.

Forgiveness – What We Know So Far

While many of the details still have to be worked out, you’re probably aware that the recently-enacted loan forgiveness applies if you are single with Adjusted Gross Income (AGI) of less than $125K or married with AGI of less than $250K.

Again before letting that internal Soup Nazi strike you down, remember AGI is not your gross income/salary. If you are a W2 employee, your AGI would be approximately:
Salary+Bonus minus Retirement contributions minus HSA (Health Savings Account) contributions.


In addition to retirement and HSA contributions, there are many other adjustments that can affect your AGI, but they are less common. The point is that if you make $135K and think you don’t qualify, think again. If you contribute $6K to your 401K and $6K to your HSA, your AGI is $123K, so you actually do.

If you are self-employed you probably have even more deductions, so a thorough tax review would be in order. Maybe an amended return for 2021 might be worthwhile if you find a deduction that was missed.

The amounts that can be forgiven are $10,000 for all borrowers with public loans (not private ones), and an additional $10,000 if they were also Pell Grant recipients. The website at student aid.gov will tell you which loans you have that are forgivable.

What if you paid off your loans within the past year and you would otherwise qualify for forgiveness? Surprise – you will be able to apply for a refund. Details on that yet to come, though.

What if you are the parent of a current student? As long as the student had loans as of 7/31/22, and your household’s AGI falls below the income eligibility figures, your child’s loan(s) would qualify for forgiveness.

Summary – Several Strategies

In summary, now there are several strategies to employ that can help ease the burden of student loan debt. Consult with a knowledgable CPA or CFP on what opportunities there might be for you.

You can make an appointment to speak with us about your student loans or other concerns on our Contact Us page.

Continue ReadingStudent Loan Forgiveness 2022? 6 Questions To Ask

Parents, Aging and Finances

Parents, aging, and finances. Talking about aging with parents can be one of those difficult conversations we want to put off for another day. Like other difficult conversations, though, avoidance usually makes it harder.

Transitions in aging can fall into four broad categories: financial matters; health care decisions; living arrangements; and transportation. This week’s post tackles the topic of finances.

Helping Parents With Finances

The downside of the digital age is that it makes seniors more susceptible to fraud and scams. They can send or spend money anywhere, or divulge sensitive information, with one click. Without being physically present, adult children might not be as quick to catch the warning signs that a parent has become susceptible.

The most common kind of elder financial abuse occurs from people close to the parent. Sometimes it can be a new person in their lives – a girlfriend or boyfriend, a housekeeper, or a companion caregiver. Checking up on new friends and companions might not feel good, but is a necessary step.

Are parents located far away? In her wsj.com article, Veronica Dagher interviews financial advisors and aging experts on how to help parents with finances from a distance.

By volunteering to help with bill paying, the person with the DPOA can begin to get acquainted with the parent’s accounts, particularly what kind of expenses are normal and which are not.

Parents: Start Early, Small and Often

Parents would be wise to communicate early with adult children. While the topic of money is taboo in many households, it will make everyone’s life easier if the parent is open and communicative. It’s helpful to know how many accounts there are, how the accounts are managed, and approximate amounts or a range of amounts in each. Describe how the transition of help with money would go in an ideal world. Other steps:

  • Provide contact information for the financial advisor, investment manager, lawyer, and accountant.
  • Arrange an annual family meeting with any or all of the above.
  • Begin conversations early with small topics first. Allow everyone involved to grow into their roles.
  • Build on that trust to expand financial duties as time goes on.

Adult Children: Start Early, Small, and Often

For the adult children, instead of anticipating one future difficult conversation, experts recommend thinking of each topic as a continuous conversation to be had over a number of months or years. Following are some pointers.

Start the conversation with curiosity.

“Mom/Dad, if you should ever reach the point where you’re unable to (balance your checkbook, drive on the interstate, feel confident about a medical decision, feel comfortable living on your own), what would you like to have happen?”

“What would be an example of something that would indicate the point at which you would like help?”

Listen intently. Even if it is not what you would like, check for understanding by repeating back what you heard. For example, “So what I hear you saying is that, if you have a fall, that’s when you’ll ask for help. Is that true?” Sometimes when we hear things back, we change our minds, or clarify.

Things To Do Now

As noted in Dagher’s article, one of the most important documents is a Durable Power of Attorney (DPOA). If a DPOA is more than a few years old, or there has been a change in health status, have it reviewed by an elder law attorney. The attorney will make sure the powers granted are up to date with current law and broad enough for the parent’s current situation.

Since so much of our financial lives are online, it’s also wise for a parent to share emails, userids, and passwords with the person named as DPOA. Ideally, all of the financial institutions where a parent has accounts would have copies of the DPOA and confirm they recognize it as valid.

By volunteering to help with bill paying, the person with the DPOA can

  • begin to get acquainted with the parent’s accounts
  • become known to the institutions where accounts are held and
  • learn what kind of expenses are normal and which are not.

Additionally, it tends to work better if just one person is named as DPOA. Then name a backup or successor in case they are unavailable. Joint DPOAs can be a headache.

DPOA Does Not Work for Health Care

While the DPOA covers financial and legal matters, it does not address health care decisions. For those, a health care proxy or Designation of Health Care Surrogate is necessary. With Covid-19, family members may not be allowed in the hospital. Should an emergency happen, the health care proxy, as well as any living will, DNR (Do Not Resuscitate), or DNH (Do Not Hospitalize) documents should be provided to paramedics and/or hospital staff.

For a free resource specifically addressing the talk about end-of-life care, see The Conversation Project, at https://theconversationproject.org/starter-kits/. For a primer on the 4 basic estate planning documents needed by everyone, see Part 2 of 2 – The Talk That Only Gets Tougher – 4 Documents.

Simple But Not Easy

These are difficult scenarios to think about or talk about. The most important thing to do now is begin with a single step. Whether you are the parent of adult children, or the adult child of an aging parent, it’s never too early to broach the topic. Rather than waiting until it’s too late, start while it seems too soon. That kind of talk will be a lot easier.

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Read more about the article The Ideal Retirement Plan: It’s About More Than Money

The Ideal Retirement Plan: It’s About More Than Money

view from the porch

The ideal retirement plan: it’s about more than money.

I knew a man who couldn’t wait to retire from his government job. With a few decades of hard work and wise money decisions, he was able to call it quits at 55. Thrilled with his newfound financial freedom, he immediately took to cooking, golf, dating, traveling, fishing, and having fun. For the first few years, every time I saw him, I could see the lack of work responsibilities had lightened his step and his heart.

At 65, he moved to a Florida retirement community, the kind with nearly identical roofs, lawns and mailboxes. One of the few ways to stand out was by the cover on your golf cart. To outsiders, everyone looked the same, dressed the same, exercised the same, and seemed to absolutely love their new life in the sunshine.

Happy on the Outside But No One to Talk To

One day on the phone the man said, “Y’know, I really like talking with you. I don’t have anybody to talk to here.”

This was a shock. “What?” I said, “Surely there are some retired CEOs, executives, people that think like you there, that play golf, and that you have a lot in common with.”

“Nah,” he said, “I don’t have that much in common with anybody here.”

I thought that was crazy. He talked like them, dressed like them, shopped like them, and played golf and pickleball with them. He probably was just as well off, financially, as any of them. How could he not have someone to relate to?

Unfortunately at that time, I was unfamiliar with the signs of depression. Five years later, it took his life.

Three Myths About the Ideal Retirement

According to writer Mitch Anthony, there are three myths about the ideal retirement plan.

Myth 1: “This part of my life is going to be about ME.”
Anthony says, “This is a formula for emptiness.”

Myth 2: “I am going to surround myself with people like ME.”
Anthony’s reply: “This is a formula for stagnation.”

Myth 3: “I am going to do nothing but relax.”
Anthony: “This is a formula for boredom.”

Emptiness, stagnation, and boredom. Doesn’t sound much like the ideal retirement. Yet, these three myths form the basis of a lot of retirement plans.

A Mayo Clinic gerontologist told Anthony, “A life of total ease is two steps removed from a life of total disease. The first step is they get bored, the second step is they grow pessimistic, and then they get ill.”

The Dark Side of Retirement Plans

This is what writer Robert Laura termed the “dark side” of retirement. For some who don’t think about how to bring meaning and purpose to their life after work, serious mental health maladies, like depression and addiction, await. Florida retirement communities have some of the highest suicide rates in the country, particularly growing among white males over age 65.

Of course not everyone in retirement communities is depressed. It’s common to have constant fun, be social, and live vibrantly, filling time with volunteering, mentoring, and circles of friends.

Plan For More Than Money

For those like the man above, jumping off the work treadmill onto the retirement scene without a plan can be risky. Instead, South Dakota financial planner Rick Kahler responded to Laura’s article with several wise suggestions for the non-financial part of a retirement plan:


*Ask yourself how much of your identity is tied up in what you do, rather than who you are.
*Start creating a life to retire “to” rather than simply a job or business to retire “from.”
*Consider gradually reducing to part time and taking extended vacations, rather than showing up one day, and having nowhere to go the next.
*In your ideal week, identify how would you spend your time, and with whom?
*Have a diverse social network outside of work.

As one example, writer Douglas Bloch complained his parents’ retirement community had no children, while his retired friends were finding fulfillment in their own neighborhoods mentoring youngsters in math.

The best retirement plans start with a plan for a fulfilling life first, then match up the plan with money decisions. That’s why good planners ask, what’s the money for? For most, it’s not to support boredom, stagnation and decline. If you define what an ideal retirement means first for you, then your retirement plan and your retirement life have far better chances of success.

Dedication to Mental Health Awareness

Following May’s Mental Health Awareness month, every June I republish this story in memory of the man who inspired it. Retirement is a life transition that has an under appreciated impact on mental health.

Resources for Ideal Retirement Plans:

Dori Mintzer, Ph.D. has a weekly live interview series and podcast called “Revolutionize Retirement.” In it, she interviews experts on retirement life.

Mitch Anthony’s book, The New Retirementality.

Holly’s book, The Mindful Money Mentality: How To Find Balance in Your Financial Future

Sign up for our free monthly e-letter, “The View From the Porch.” We never share your email address.

Continue ReadingThe Ideal Retirement Plan: It’s About More Than Money

The ABCs of Behavioral Economics

The ABCs of Behavioral Economics: This article was originally published in NAPFA Advisor magazine.

Behavioral economics, with its long lexicon of “biases,” has enjoyed great popularity for a couple of decades. However, it’s also one area where financial planning students feel the least prepared. Experienced advisors, too, find this relatively new field fascinating, but yearn for practical ways to apply it, especially amid the market volatility of the past couple of years.

Sometimes it’s helpful to boil things down to basics. At the risk of oversimplifying, here are three reminders, A-B-C style, of what behavioral economics is about, how it works, and how advisors can use it.

A—What is behavioral economics about? A: Actors (economic ones) are not always rational.

Economists used to assume that actors (people and companies) always act rationally to increase their profit, wealth, or “utility.” The father of behavioral economics, Daniel Kahneman, won a 2002 Nobel Prize for proving they actually don’t. However, even today, both clients and advisors still tend to assume finance is about facts, not feelings.

Throughout my early banking career, I made this assumption. For example, when the estate tax exemption was $675,000, I reveled in suggesting ways that nearly every client could save on estate taxes. One husband, whom I knew liked to argue, pushed back when I brought this up. “Why do you automatically assume I want to save taxes?” he blurted.

His wife looked at my jaw hanging open. I answered, meekly, “Because nearly everyone I talk to wants to save taxes?”

“Well, maybe I don’t!” he said. “The government has a lot of good programs.”

Before that day, I had never asked how anyone felt about paying taxes (who would ask such a stupid question?), or what the idea of legacy meant to someone (too personal, I might upset them). My job, before that day, was like Sergeant Joe Friday, “Nothin’ but the facts, ma’am.”

Now I know all facts, especially anything with the word “estate” in it, for goodness’ sake, come with feelings. It’s far better to get to the feelings first if we want any chance of rational decision making.

B- Why Does This Happen? B: Brains have powerful primitive parts.

In his 2011 best seller, Thinking: Fast and Slow, Kahneman divides the brain into two systems: System 1 and System 2. To oversimplify, System 1 is the older, primitive part, and it generates emotional responses. System 2 is the newer, intellectual part.

Most of the time we’re quite aware of what’s going on with System 2 (intellectual), and quite unaware of System 1 (emotional). We fail to remember how much more powerful System 1 is than System 2. To make matters worse, System 2 falsely believes it can override System 1 anytime it wants.

For example, have you ever been sitting at a traffic light and suddenly heard a honk from the car behind you? My System 1’s initial thought is, “Who the !@#$ is honking?” as I glare in the rear-view mirror. A fraction of a second later, it occurs to System 2 to, duh, see if the light turned green. System 1’s embarrassment kicks in with a little wave in the mirror, “Sorry!”

One of the signs of a true professional is the ability to override System 1 through experience and practice. Kahneman uses firefighters as an example. After many fires, they learn that fear doesn’t go away. They accept it as part of the job, then, with experience, use it to make split-second but measured decisions.

In the last couple of years, have you not been a little scared, at least once? A study from the Journal of Behavioral Finance showed financial professionals are just as prone to emotional errors as retail investors. Knowing and accepting this should make us even more cautious. Younger advisors know from their training not to act irrationally based on fear. Senior advisors know from experience not to act irrationally after seeing advisors who did.

Our System 2 can try saying, “I won’t be scared the next time the market falls 10%,” but your System 1 will decide that involuntarily, not you.

System 1 beats System 2 to the punch nearly every time because System 2 is wired to conserve energy. So, it allows System 1 to do most of the work, which mainly involves scanning for threats. Fear isn’t wrong. It’s unavoidable. Whether and how we handle it is our hallmark.

C—What can we do about it? C: Curiosity can help.

How do we foster conversations in which System 2 creates a measured response to System 1 impulses? One way is to concentrate on being curious. This means to expect our own emotional response but not react to it. Accept whatever the client brings up. Focus on better understanding the client’s responses.

Here is an example:

Client: “I think we should buy/sell/do something different than what we’ve been doing.”

Advisors’ thoughts under the influence of System 1:
Fear: “Are you leaving?”
Guilt: “I should have called you sooner.”
Contempt: “You stupid idiot!”
Impatience: “No. You are acting irrationally. I don’t have time for this. Here’s my advice. Take it or leave it.”

Advisors under System 2 (with System 1 emotions in the background):
“I understand, and I would like to hear more about what you’re thinking.” (Fear: Yikes! No! You might blame me for this.)

“It sounds like you are really concerned. Tell me more.” (Contempt: After all our meetings, why can’t you just be calm?)

“I’d be happy to talk about that further. Help me understand how you are feeling.” (Impatience: Do I really have to listen to this?)

We can help the client discover their emotions themselves, simply by creating a safe space for it. Upon reaching that point of self-discovery, ironically, they feel more understood by us. Once someone feels understood, only then will System 1 sometimes step aside and make them ready for System 2-based factual advice.

Sometimes Advisors Need to Hold the Advice

In a 2016 article for The Journal of Financial Planning, Brad Klontz wrote,


The secret is this: when we are doing our best work, we are bringing little or nothing new to the exchange. We are asking no questions. We are offering no advice. We are making no recommendations. We are providing no analysis or insights. We are abandoning our goals and agendas and are just bringing ourselves. Sure, we are facilitating a process, but we have learned that our effectiveness grows as our ability to be present grows. In our best moments, we are engaged in exquisite listening, which is the best therapy.

Klontz, Van Sutphen, and Fries, “Financial Planner as Healer: the Role of Financial Health Physician,” Journal of Financial Planning, December 2016

Behavioral economics can feel counterintuitive: Expect irrational responses, and accept that feelings are more powerful than facts. By not immediately reacting with advice, we become the best advisors.

For more on applying behavioral economics principles to real-life financial planning, see The Mindful Money Mentality: How To Find Balance in Your Financial Future.

Continue ReadingThe ABCs of Behavioral Economics