CFP

New Year: What’s In Your Notebook?

It's a new year: what's in your notebook? You know, that one with all of your passwords, account numbers, doctor names, and that very important song that must be played at your funeral. Yeah, that notebook. Where is it? It might reside digitally on your computer or in the cloud, or it might be a pile of papers in a file cabinet, or it might be in an old-fashioned 3-ring binder. The new year is a good time to ask: how easily can someone who needs it find it? Who Might Need the Notebook and When? Everyone needs a someone in mind for the notebook. Your someone (Kate Hufnagel, the Digital Wrangler, calls this "Your Person") is who will step in for you and help to handle things when you can't. If an immediate someone does not spring to mind, consider asking a professional to be that someone - an attorney, accountant, or professional fiduciary, for example. When will someone step in? At a time when you need the notebook, but can't get to it. We can imagine all kinds of accidents and tragedies that might bring about a need for the notebook. Rather than dwell on those, let's imagine that you are suddenly swept away on an all-expenses paid trip out of the country to a remote island with spotty cell coverage. While you are whale-watching and snorkeling the reefs for an indefinite period, things still need to be handled back home. Bills to be paid. Taxes to be filed. Gifts to be given. People to be notified of your absence and introduced to Your Person who is handling things. What Goes in the Notebook? In essence, the Notebook is a central place you keep information that Your Person will need in case something happens to you. Common and essential items in the Notebook include: Your five basic estate planning documents: original will (drafted by an attorney in the state where you reside), living will, health care power of attorney, durable power of attorney, and HIPAA designations. Advanced estate planning documents: trusts, partnership agreements, business buy/sell agreements, shareholder agreements, etc. Insurance policies. ALL of them: life, long term care, health, property, car, boat, liability, and any others. Contact information for professional advisers: attorneys, bankers, accountants, investment advisers, insurance agents, and (of course) your CERTIFIED FINANCIAL PLANNER™. Also, if your advisor has an assistant or paraprofessional who knows you and your situation, write down their contact information and a little note to that effect. (“Sharon is the assistant and she runs the whole place.”). All of your health care providers – doctors, dentist, optometrist, veterinarian (who is going to take care of Fluffy?) Put similar information by each one – what they helped you with and if any office or nursing staff know you and your history. Important to remember also, anything handled online: digital password manager, online user ids and passwords, bank statements, investment accounts, real estate deeds and mortgages. So much of our financial lives nowadays keys off…

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The Retirement Answer? A Blank Stare

The Retirement Answer? A Blank Stare I had just asked a 59-year-old, "You said you can retire in 3 years. How will you spend your time after that?" Expressionless, all he gave was a blank stare. "I never thought about it," he replied. Unfortunately, he wasn't the first 59-year-old with that answer. "I don't know" is a more common answer than most think.  More To Retirement Life Than Money  According to a study by United Capital, when asked about their financial life stories, most people talked about working and spending, not saving and investing. Over the decades of our working lives, we tend to follow a formula: Work. Spend. (Save). Repeat. We do this knowing one day those (savings we try not to think about or touch) should equal a nice sum, hopefully enough to reach the nirvana of "financial independence." Along the way, we can get trapped into planning meals and vacations, but not a potential 25-year chapter of our life. If nothing trips up the formula (divorce, premature death, disability), then a milestone birthday, the loss of a parent, or the arrival of a new boss may cause one to dial up a financial planner and ask, "Am I there yet?"   Are You "There" Yet? To which the answer is usually, "That depends." That depends...on where "there" is. "There" = how, with whom, and where you will find purpose, meaning, and happiness in life after your Work-Spend-(Save)-Repeat chapter. Once that's known, "there" can be translated into real financial goals. If you don't know what "there" looks like, then attempts to answer the question are merely rough guesses. More importantly, if you don't know, you're not likely to enjoy that supposed nirvana time nearly as much.   There are many thought leaders contributing to discoveries about the time of life past "Working" and before "Old." That time of life, which will be 25 or 30 years for a lucky few, goes by many names: Your Third Age. The Third Stage. The Encore Years. Your Life's Next Chapter. Examples of such leaders include Dori Mintzer and Mitch Anthony. According to experts like these, retirement planned well has the potential to be a time of peak fulfillment and meaning. Not planned well, potential paths lead to boredom and, in the worst cases, clinical depression. Real Retirement Planning  Many people think "retirement planning" means "IRA investments" or "401K rollovers" or "pension options." Those are certainly part of it. But the best, yet sometimes the most difficult, kind of retirement planning is not found on your retirement account statements. It's found inside of you.  Begin with a blank stare, and build your "There." That's real retirement planning. Not sure where to begin? Check out this free download: https://www.hollydonaldsonfinancialplanner.com/wp-content/uploads/2018/11/Beyond-the-Numbers-Whats-Retirement-Money-For.pdf for a questionnaire about what kind of retirement lifestyle choices are ideal for you.   Or subscribe to the award-winning monthly letter, "The View From the Porch," at https://bit.ly/3t2uwfn.

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5 Identity Theft Types of Pain

5 identity theft types of pain. Yes, identity theft is a pain. Before a family member's recent experience, my thinking was "pain in the neck." It's a nuisance, for sure. However as experienced by this family member recently and by me as the power of attorney holder, it's more than just a nuisance. It can induce shame, violation, hypervigilance, and eventually isolation. Pain Type 1: Shame The family member fell victim to a spoofing scam. The bad guys called her pretending to be AT&T. They convinced her to share the Multi-Factor Authentication (MFA) code which allowed them to steal her phone number through a SIM swap. Although they were unsuccessful with her multiple times at first, it only took one convincing moment that they were really from AT&T and trying to help for her to cave in to their pressure. Three days later, they called me too. The AT&T logo appeared on my screen. I answered it, thinking it was AT&T calling about her phone. Fortunately when I heard the man with the Eastern European accent ask for her, I was hesitant. But not suspicious. Just wondering why AT&T was calling my number (surely they know this number belongs to me?) and asking instead for her. The reason was that my phone number was on a few of her accounts as the MFA device. So her stolen number wouldn't work for those accounts. They needed mine, and were calling to attempt the same ruse that had worked with her. The call lasted all of 26 seconds before he abruptly hung up. Only then I thought, "Hey, wait a minute. I don't think that was AT&T." I felt like an idiot at that point. I even called the number back and it played an AT&T greeting. Fortunately I had not given them any information. Since that time, I have read that a cybercriminal ring bribed AT&T employees which allowed them to impersonate AT&T to conduct their operations. Being a victim is nothing to be ashamed of. Professional criminals are skilled. Yet many victims feel shame at being duped. Pain Type 2: Violation Three days prior to that call, I received multiple email alerts that changes were being made on her USAA profile. It was a Saturday night. I called her to confirm she had not spoken with USAA. She had not. "Hmm," I thought, "We will have to call about this when they're open." I wasn't alarmed. Two days later, a holiday, email alerts began coming from her bank account. The password and mailing address were changed. I knew she had not done this. I certainly had not done this. Who is doing this? Someone is breaking into the bank account and changing information? How did they even know where she had a bank account? How did they get the username and password? Is this connected to USAA? When someone is in your bank account changing personal information, it feels violating. Despite the bank's assurances via hours of calls and visits…

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Why is an IRS Form 5498 Arriving in May?

Why is an IRS Form 5498 arriving in May? You just gathered all your forms two months ago and now a new one arrives after the deadline. What gives? Do you have to call your accountant again? Hold the calls. You may remember reporting to your accountant (or TurboTax) that you made some contributions to an HSA or IRA. Perhaps you made them last year, or perhaps you made them before the April 2024 deadline and had them count for 2023. Or, you took money out of these accounts, or are getting ready to start your required minimum distributions (RMDs). These are reasons why you are receiving the form. What's Form 5498 for? One purpose of the Form 5498 is for the financial institution that holds your account (called a “custodian”) to verify to the IRS that you did indeed make the contribution that you claim you did on your tax return. Since everyone usually has until the tax filing deadline to make contributions, the IRS gives custodians until May 31 to send Form 5498 to account holders. Another is to verify distributions. If you are over the age for required minimum distributions (RMDs), Form 5498 also tells the IRS what your RMD will be for the current year. The RMD is determined by the account balance on the final day of the previous year (December 31, 2023 for 2024). What you need to do with the form is check that what's reported on the form matches up with what actually happened and also with what you actually reported on your return. Check Form 5498 For Errors Seriously, make sure it’s correct. Mistakes are common. In 2018, my husband and I both received erroneous 5498’s for our Health Savings Accounts (HSAs). Mine showed $0 contributions for 2017 and his showed 2 years’ worth. What the....? So we called the bank, got the records straight, and had them send corrected 5498s to the IRS. Why go to the trouble? If your 5498 contribution or distribution differs from what you reported on your 1040, at some point it could get noticed. One fantastic sunny day after skipping down to your mailbox, you may find inside a skinny white envelope with “Internal Revenue Service” in the return address. Fantastic day ruined. More than likely, all the letter will say is, “Hey, we noticed your 5498 doesn’t match your 1040. Whassup?” But still. It will be in IRS-Speak and look and sound and feel serious, with a deadline for giving them an answer. Save yourself the trouble of having to answer (or pay your accountant to answer for you) and do a quick check now. It only takes a few minutes. Does your contribution amount for 2023 look correct? Did you take any 2023 HSA or IRA distributions, and if so, do those look correct? (If not, make sure the distributions say $0.) Does the reported year-end account balance look accurate? Is your SSN correct? How about your name, including your middle initial? If…

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Graduation Gift? How About Legal Documents?

Graduation gift - How about legal documents? Arguments have been made that a set of legal documents are the best gift for a high school graduate. Now that's not quite as bad as coal in a Christmas stocking. But not quite as much fun as a MacBook Air, either. . Think about it - an 18-year-old is a legal adult.   “What this means to each of us is the only individuals that can make financial or health care decisions for us are the individuals we legally appoint.  Mommy and Daddy are no longer the legal guardians,” says Clearwater, Florida attorney Linda Chamberlain in her own blog post on the topic: The Best Gift for the Graduate But They Don't Own Anything! You might say, "But my 18-year-old doesn't own anything. Why do they need a will?" There are other documents that become important upon reaching adulthood. For 18-year-olds who don't own anything, they still have rights, such as: to private medical records, to make their own health care decisions, to sign their own lease or to open, close or pay bills on a bank account. If the young adult is incapacitated, parents can no longer legally do those things for them. The most common worst-case scenario described is an accident where the young adult is hospitalized. This is when documents like: a HIPAA designation (allows consent to share medical records), Health Care Surrogate (consents to have health care decisions made), Durable Power of Attorney (for managing money and accounts), and Living Will could be crucial. In Florida, most estate planning attorneys will provide a set of documents for a small flat fee, especially for children of their established clients. Ask your attorney, check your local estate planning council directory, or ask your professional advisors for referrals. Contact us if you need referrals for Tampa Bay area attorneys or if you have other financial concerns for someone becoming a newly-minted adult. Schedule a call with the online calendar button at our page: Contact.

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Read more about the article 5 Top Books Read in 2023

5 Top Books Read in 2023

5 top books read in 2023: What books made an impact on you last year? Each year a few selections from the prior year's reading are highlighted here. For 2023, below are 5 favorites (actually, 4 books and 1 app) from finance and retirement, self-help, and fiction. Finance and Retirement The finance and retirement book recommendation this year is Get What's Yours: The Secrets to Maxing Out Your Social Security, by Lawrence Kotlikoff, Paul Solomon, and Philip Moeller. Although published in 2016 it's been updated for current changes to the claiming rules. Do you really need to read a book about Social Security? Isn't filing pretty straightforward? Maybe, maybe not. It's easier to say who would not necessarily benefit from the book than who would. The book might not be for you if: you already filed for Social Security more than 12 months ago (because, did you know everyone gets a one-time filing do-over in the first 12 months?); or you are not yet 62 and you and your spouse have never been divorced, disabled, widowed, or worked for an employer who opted out of participating in Social Security (generally this would be certain railroad companies or municipal governments). These rule out a few million people, but for the other tens of millions, there is probably something useful inside this book that could save anywhere from a few thousand to a few hundred thousand dollars over the rest of their lives. Life Improvement: (also known as "self-help") Fierce Self-Compassion: How Women Can Harness Kindness to Speak Up, Claim Their Power, and Thrive by Kristen Neff, Ph.D.. Neff's specialty reminds me of Brene' Brown's - a narrow niche of psychological research for which she has chosen to become a deep expert. In Brown's case it's empathy while in Neff's case it's self-compassion. I didn't even know what self-compassion meant when I began reading and studying Neff's work about three years ago. Lest it be confused with becoming a tender-hearted wuss, Neff makes clear that self-compassion requires a ferociousness that is societally frowned upon in women. How to act on that feeling while also expressing self-compassion is the balancing act which she skillfully examines and explains. Not a book, but an app: Insight Timer. I keep this one in my Mental Health folder on the first screen of my phone. It's my go-to app first thing in the morning for a guided meditation or simple calming wake-up music (try for example, "A New Day," by Wakes/Ada and Nathan). Later I consult it again when I need to get to (or get back to) sleep. The teachers are well-vetted by IT and then rated by worldwide listeners. Guided practices span the gamut of spiritual and religious traditions. There are musicians in varied stress-relieving genres to choose from (calming piano - try Chris Collins; cello - try The Wong Janice; recorded nature sounds - Insight Timer Earth). Currently IT claims 28 million listeners. Fiction On the fun side, here were 2 picks for fiction.…

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When Money-Opposites Attract

When money-opposites attract: One's a saver. One's a spender. One would rather be at the mall. The other is into investments. While they love their differences overall, they struggle with disagreements about money. Money is the third most frequent topic of marital arguments, after chores and children. Ironing out the wrinkles in money beliefs, behaviors and decisions can go a long way toward reaching financial goals with peace and harmony - whether those goals be at the mall, or in the savings account. How can couples handle mixed money messages? Try three steps. Step 1: Money Script Awareness Sometimes we don't realize the underlying money beliefs that drive our own and our partner's decisions. These are often called money "scripts." (You can find yours using an online test developed by Dr. Brad Klontz here.) Share with each other the money messages you grew up with. Examples might include "Money doesn't grow on trees," or "You only live once." The goal in sharing is to begin to reach an understanding of the other's background. Share who influenced you when it came to handling money. Money script influences can come from various authority figures - parents, grandparents, teachers, coaches, or spiritual leaders. Share what you believe is the most important value that money provides to you. Values derived from money can include security, achievement, sharing, and spontaneity/having fun. Even a general rejection of money (think 1960s hippie culture) can be a money value. Step 2: Concentrate on conversation Now that the money differences are on the table, how do conversations about it go? It's important to communicate about how you communicate. The goal is for each partner to feel heard and understood. If one or both are falling short on feeling heard and understood, "active listening" is one tool to try. In an abbreviated form of active listening, each partner takes a turn being the sharer and the listener. The sharer tells their story or shares their statement about a topic. The listener then completes three steps. mirror back what they thought they heard, check for understanding, and empathize if appropriate. For example, say the sharer talks about feeling discounted or ignored with important money decisions. The listening partner listens without comment. The listening partner's three steps might begin like this: "So what I heard you say was..." (repeat back, even if it's verbatim, what you heard) "Did I get it all?" (If yes, go to next step. If no, listen to what was missed, and go back to mirroring what you heard.) "I can see how that would be difficult/challenging/etc. for you." Or, if it's true, "If I were in your shoes I would feel the same." This empathetic statement is not necessarily an agreement (although it's nice), but at a minimum an acknowledgement of understanding. All three of these must be completed before it's time to switch roles. Step 3: Respectful Negotiation With enhanced understanding, a couple is better equipped to come to a mutually agreeable solution. Several years ago…

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New Year: What’s In Your Notebook?

It's a new year: what's in your notebook? You know, that one with all of your passwords, account numbers, doctor names, and that very important song that must be played at your funeral. Yeah, that notebook. Where is it? It might reside digitally on your computer or in the cloud, or it might be a pile of papers in a file cabinet, or it might be in an old-fashioned 3-ring binder. The new year is a good time to ask: how easily can someone who needs it find it? Who Might Need the Notebook and When? Everyone needs a someone in mind for the notebook. Your someone (Kate Hufnagel, the Digital Wrangler, calls this Your Person) is who will step in for you and help to handle things when you can't. If an immediate someone does not spring to mind, consider asking a professional to be that someone - an attorney, accountant, or professional fiduciary, for example. When will someone step in? At a time when you need the notebook, but can't get to it. We can imagine all kinds of accidents and tragedies that might bring about a need for the notebook. Rather than dwell on those, let's imagine that you are suddenly swept away on an all-expenses paid trip out of the country to a remote island with spotty cell coverage. While you are whale-watching and snorkeling the reefs for an indefinite period, things still need to be handled back home. Bills to be paid. Taxes to be filed. Gifts to be given. People to be notified of your absence and introduced to Your Person who is handling things. What Goes in the Notebook? In essence, the Notebook is a central place you keep information that your someone will need in case something happens to you. Common and essential items in the Notebook include: Your five basic estate planning documents: original will (drafted by an attorney in the state where you reside), living will, health care power of attorney, durable power of attorney, and HIPAA designations. Advanced estate planning documents: trusts, partnership agreements, business buy/sell agreements, shareholder agreements, etc. Insurance policies. ALL of them: life, long term care, health, property, car, boat, liability, and any others. Contact information for professional advisers: attorneys, bankers, accountants, investment advisers, insurance agents, and (of course) your CERTIFIED FINANCIAL PLANNER™. Also, if your adviser has an assistant or paraprofessional who knows you and your situation, write down their contact information and a little note to that effect. (“Sharon is the assistant and she runs the whole place.”). All of your health care providers – doctors, dentist, optometrist, veterinarian (who is going to take care of Fluffy?). Put similar information by each one – what they helped you with and if any office or nursing staff know you and your history. Important to remember also, anything handled online: digital password manager, online user ids and passwords, bank statements, investment accounts, real estate deeds and mortgages. So much of our financial lives nowadays keys off…

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Challenges and CoastFire: My Story

My story: The following is an updated excerpt from the introduction to my book, The Mindful Money Mentality: How To Find Balance in Your Financial Future (Porchview Publishing, $20). As a behavioral economist (in a field that studies the psychology of personal economic decisions), I have a keen interest in our relationships with money. I care about maximizing its usefulness as a tool rather than elevating its status as an end. But for much of my life, I had those two reversed. I did my own financial planning backwards. I put the pursuit of money first, life second, and myself last. In other words, I floated in a fog about my attachment to money, swept along by society’s encouragement and my own beliefs. My money mentality was not aware, awake, or intentional. It was unconscious. It was anything but mindful.  Ironically, I was one of those successful savers. Starting when I was a teenager, I kept track of every penny I spent. I could not wait until my 21st birthday so I could start contributing to the 401(k) at work.  Money as the Main Goal In my 20s and 30s, I focused on money as an end, determined to define my success as a person by the amount of money I made. As a result, I made some choices that caused me, and those around me, to suffer unnecessarily. I fretted over how much essential things cost. It hurt me to spend on myself for anything nice, much less on anybody else. I now realize that having money was a way to feel good about myself. In my mind, my earnings defined my success as a person. This is the area where I was most imbalanced, and I regret some of the decisions I made then.  After college, I joined a Miami bank training program. I saw that most of the trainees chose to live in a new suburban complex requiring a Metro commute. I chose to live in cheaper North Miami, only ten minutes from downtown, proud that I was saving on rent, gas, and Metro fares. The building was newly renovated but occupied mostly by taxi drivers who kept odd hours, and the crime rate was higher in my neighborhood. My car was broken into in the parking garage. I did not get much exercise because, as a 5-foot-3-inch 20-year-old, I didn’t feel safe going outside.  Further, while my coworkers were discussing the fun evenings they had had at south Miami neighborhood restaurants, I thought, “Bah, humbug!” I was proud not to “waste” my money on frivolities. I ate mostly sauteed vegetables and microwave popcorn in my apartment. Over the seven-month training program, I not only did not exercise enough, I unconsciously distanced myself from the camaraderie of the other trainees. While I eventually fixed the exercise deficiency later in life, the friendships I might have made and enjoyed today are absent.  A Vicious Cycle It was not easy for me to accept that what you have is…

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