It’s a rare person who buys a car or a refrigerator without comparing several different options, probably from several different sellers. Yet we humans have a lot of trouble shopping around and comparing our options before we hire a professional. That doesn’t make sense when you think about it — our professional advisers may have a much greater impact on our well-being than our refrigerator!
I’m guessing that maybe there are two reasons we don’t shop around for professional advisers: a) we didn’t learn how from our parents (who may have taught us how to shop around for products from groceries to vacuum cleaners); and b) we feel awkward asking a lot of questions and interviewing professionals, especially when they are the experts and we may not know very much about the topic for which we are seeking an adviser. This applies to attorneys, tax preparers, investment advisers and a wide range of other professionals. It probably applies to experts like plumbers and electricians, too.
I’m going to focus here on financial advisers, but the principles are the same for all professionals. Our financial advisers have a huge impact on our lives, so we need to get over our discomfort, and “just do it.” (forgive me for relying on a phrase made famous in commercials back in the 1970’s or 80’s). Really. This is a time to suck it up and force ourselves to take on something even if we’re nervous about it.
Here’s some good news: reputable financial professionals will understand and support our desire to choose an adviser that fits our needs. They will generally be happy to schedule an appointment (maybe 30 minutes) so we can learn more about them – how they do their work, how they are compensated, what experience they have, and how they stay current in their field. Our job will be to go in prepared with questions we want to ask. (Don’t worry — some resources are identified below!). And then our job is to finish the interview, thank them, and leave without making any decisions. That allows us to interview other individuals, check references, consider what we have learned, and follow up with additional questions before choosing the professional we trust to guide our financial future.
For ideas on what to look for and what kinds of questions to ask, I suggest you begin with information at the following links: FINRA (the Financial Industry Regulatory Authority); Investing for Your Future (national Extension system); Investor Bulletin (from the Securities and Exchange Commission).
Add your ideas here — what are YOU looking for in a financial professional?
A couple of years ago, I shared about my experiences as an adult child with an aging parent who came to live with me. One of the first things I did when I received word that dad would be coming was to look for support or companionship for him. Early on, he was able to be left home alone during the day (as my husband and I both worked) but I didn’t want his life in my home to be a lonely existence. My neighbor was on a similar journey; her father had also come to live with her. Dad and the neighbor became friends and most days, would walk downtown together for coffee. I appreciated the fact that the neighbor could make sure Dad found his way home. How lucky I was to know of my neighbor’s similar situation and their willingness to work together in providing quality of life for our parents.
My daughter, who lives in Boise, is very tech savvy. I enjoy hearing about her use of technology to solve problems or streamline tasks. To coordinate volunteers or donations of food for school celebrations, they use an online app called SignUpGenius.com. Accounts are free and reminders can be sent from the online app. Her close-knit group of friends uses another online app called MealTrain.com. When someone from their group has a baby, surgery, death in the family or other cause for support, the delivery of meals is organized utilizing this app.
While each of these apps was designed for a specific task, creative minds have found other ways to use them. For example, one of my daughter’s friends had a parent going through chemo. The Mealtrain.com app was used to help organize rides and moral support (company during treatments).
Another app that came to my attention was called Komae.com. This app is used for community co-ops…babysitting coops or carpooling or…use your imagination. Membership in these co-ops begins with an application process to ensure new members are a good fit for the group and to clearly communicate the expectations of the group. In the case of childcare, the app records “deposits” of time you provide caring for the children of others, and makes “withdrawals” of time when your children are cared for by others. This ensures there is a balance of give and take.
What instantly came to mind for me was the growing number of adult-children-with-aging-parents in Iowa. What if adult children caring for aging parents formed a co-op where adult care could be provided for the members by the members in the co-op. Considering the huge expense associated with care for the aging, and the fact that there is a shortage of service providers, especially in rural parts of the state, this app would be very useful. Near the end of Dad’s stay with me, this app would have come in handy as I struggled finding care providers that were willing to come to my house and sit with dad. What solutions have you found addressing the issues of caring for an aging parent?
I dug out my winter clothes this week. I had to open and move several boxes and containers to find the tubs containing my clothes. I was amused when I thought about how much time a year I spend opening the wrong tubs, looking for the right tubs. I resolved right then to downsize.
Despite the fact that the average household size has declined to 2.61 persons while the average home has doubled in size since the 1950’s, people still struggle with what to do with all their stuff. In fact, one out of every 11 people rent storage space during any given year.
There are many reasons to down-size: moving to a smaller place; passing treasures on to others; generating a little extra income by selling items; or eliminating the cost of storing stuff. For me the 2 motivating factors are eliminating the time and cost to care for and store stuff; and to not leave my kids, the burden of dealing with all my stuff when it is time to settle my estate.
If you are looking for tips on organizing and downsizing your home, check out Downsizing Your Home: A Guide for Older Adults from Kentucky University Extension.
The wife of a dear friend has lived in a care center for about 10 years now. I frequently cross paths with him and can see how much he misses her. I called him, excited to hear the details, when I saw on Facebook that she had moved back home. He explained that as her condition deteriorated over time, the cost of care in the nursing home had increased…so much so that they could no longer afford for her to live there.
That sounds like bad news, but it is truly turning into good news for them. You see, my friend has now retired from farming, and he can provide some of the care in their home. They have found it much more cost effective to hire a nurse to come at scheduled times to provide care and guidance for my friend, who wants only the best for his wife and is eager and able to be her caregiver. This solution has brought much joy to their home, as they are together again under the same roof.
As we plan for the future in retirement, we often think about three stages: early retirement when we do more traveling or activities that cost more…the middle years which cost less, when we are still healthy but do less because our goals have been met…and the later years when our health care cost rise. For my friend, the thought of bringing his wife home was not part of the original plan. Once he retired from farming and was more available to provide care, it made sense. It is important to make a plan but to also revisit that plan and see if it is still the best solution even after it has been implemented. Plans can always be revised.
The Finances of Caregiving is a series of five 2-hour workshops to expand your understanding of possible solutions for providing care for a loved one and help families plan together for the care receiver’s care. Understanding your choices means knowing your current situation. This program guides you through finding and collecting that information; it also provides information about communication strategies and options for care. To find a location of a program being offered near you, check out www.extension.iastate.edu/humansciences/finances-caregiving
I read an article last week in the popular press (based on a legitimate research brief) that offered encouragement for those who are worried they haven’t saved enough for retirement. The research project demonstrated that if you delay retirement 3-6 months, it provides the same benefit as if you had saved an additional 1% of your income for 30 years.
If you are: a) wishing you could save more, but really can’t; or b) wishing you could go back in time and start saving more, sooner, this research is encouraging because it says you can partly make up for a savings shortfall by delaying your retirement date. To be clear, delaying a few months doesn’t “magically” double the balance in your 401(k) or IRA account. The delay affects your retirement income security in several ways:
- It means additional months of contributions to your retirement account.
- It gives your money more time to grow.
- It reduces the number of months you’ll need to support yourself in retirement.
- Delaying Social Security benefits beyond full retirement age results in a larger monthly benefit. (under current law).
The fourth benefit accounts for most of the mathematical advantage of delaying retirement, but all four factors contribute. The first two actually DO increase the size of your nest egg; the third one means your money doesn’t need to be stretched so thin.
Wherever you are in your pre-retirement saving journey, it always pays to save more starting now if you can. But even a modest delay of retirement can provide a retirement lifestyle as if you’d saved more all along.
I have often talked with people who were excited about turning age 62. Why? So they can claim Social Security retirement benefits. I understand that excitement, especially from people whose jobs are causing them problems.
In those situations, however, I hold an internal debate about whether to put on my “educator” hat and make sure they understand all the factors involved in their decision about when to claim Social Security. Note: sometimes I do provide information, and other times I do not – it depends on the situation!
Claiming Social Security before your full retirement age means a permanent reduction in your monthly benefit. Having the income now will be nice, but if you live to be 90 and use up your other retirement accounts, you might wish you had waited. Here’s an example of how the benefit amount is affected by the age you claim:
- Mike’s full retirement age is 66. At age 66, his monthly benefit would be $1,496.
- At age 62, the earliest age he could claim, his benefit would be $1,060.
- On the other hand if he waits till age 70, his monthly benefit rises to $2,044.
There’s not a “right” age for a Social Security claim. Your choice depends on your situation, your priorities, and what other resources you have available. If you would ask me, I wouldn’t be able to tell you what to do – only you can decide.
What I would tell you, though, is to make sure you understand all the implications of your decision. One resource to inform your planning is an ISU Extension recorded mini-lesson on Social Security Choices (20 minutes). It is one of many retirement planning resources on our “Retirement: Secure Your Future” page.
When you near the actual decision point, the best way to gather complete information about your options is to contact the Social Security Administration.
Yes, if you have a Medicare Card, you will be receiving a new card in the mail soon. What is different? Your Social Security Number WILL NOT be on the new card. You will have a unique Medicare Number and this will happen automatically.
Why the change? – to protect your identity. Experts have long recommended that we avoid carrying our Social Security card or our number in our wallets, because if stolen or lost people can use it to set up accounts in our name. Until now, however, people who used Medicare didn’t have a choice. It’s generally important to have your health insurance card with you, and unfortunately the Medicare card contained a Social Security number. Consumer advocates have been asking for this to change, and now it will!
New cards will be mailed between April 2018 and April 2019; not everyone will receive their new card at the same time. Here in the Midwest, the new cards will start arriving after June 2018.
After you receive your new card, destroy your old card by shredding it. Start using your new card right away. Note: If you have a separate Medicare Advantage Card, you may need to keep the old card because you still need it to receive treatment.
Share your new card and Medicare number with your doctors, pharmacists, health care providers, insurers or people you trust to work with Medicare on your behalf.
The new card is paper; you will be able to print your own replacement card if you need one. Keep the new card with you. You will need to provide your Medicare card when you need care. If you forget your new card, health professionals may be able to look up your Medicare number online.
Beware! There will be scams – so watch out for them:
- Don’t pay for your new card – it is free. If someone calls and says you need to pay for it –it’s a scam.
- Don’t give personal information to get your card. If someone calls, claiming to be from Medicare, asking for your Social Security number or bank information – it’s a scam – Hang up.
- Guard your card. Safeguard the card as you would any other health insurance or credit card. Even though it no longer contains your Social Security number, you will still want to protect your card because identity thieves could use it to get medical services.
For more information about changes to your Medicare card, check out this short video or go to medicare.gov
Yep, that’s Glen with his golf cart: snow blade in the front; a 50# bag of sand in the back and chains on the wheels. Mark proudly boasts, “Had Dad been born today, he would have gone to college and been an engineer. He can invent and create anything!”
I used to wonder why people would buy a golf cart…it is expensive; it is used for a few short months; and it takes the exercise out of the sport. However, if you were to drive through any of the small towns in my area, you are sure to see people driving golf carts to visit friends or to run home from the camp ground on the far side of town; one elderly woman enclosed her cart with plastic so she could drive it year round…without a drivers license.
Seeing Glen and his golf cart made me stop and think…how much of the stuff I own was purchased with a single purpose in mind and is underutilized? I reached out to a couple of my kids this weekend, asking if they wanted a few of these things that I no longer have time to use. It created a bit of concern, “Mom’s giving her stuff away…WHY?”
I have Spring Fever. I have a goal of removing 50 bags of stuff from my home by Easter. If I don’t use it, don’t need it or can’t afford it…it is gone. By “can’t afford it,” I mean “do I really want to store it?” It costs money to store, insure, clean and maintain stuff.
How about you? Spring is coming! Take a look at YOUR stuff. How much is it costing you to hang on to it?
Several reminders lately have made me well aware of the fact that I am rapidly approaching a certain mile marker…I now qualify for the Senior discounts at restaurants, mail with special offers comes to my home daily, etc. So, when information about the TV series When I’m 65 came across my news feed, I decided I needed to add this to our queue so it will be recorded.
The fact is…we all – no matter our age – really do need to take steps to help secure our financial futures. Consider watching the Iowa Public TV showing of the When I’m 65 on IPTV.1 on Sunday, December 10 at 2 PM. It will be repeated at 3 AM on the 11th. For more information, go to http://www.iptv.org/series/25099/when-im-65/0 .
Each year we celebrate our nation’s independence and honor the work and sacrifice of those early Americans who made it possible.
Independence (or Freedom, or Liberty – pick the word you like best) isn’t something that just happens. It takes work, and, yes, sacrifice. Are you working (and even sacrificing) to achieve your own financial independence?
Personally, I am planning that the day I fully retire will be my “independence day” – the beginning of the time when I have the freedom to spend my time as I wish, without worrying about living up to the expectations of my employer. I will have the liberty to spend (or not spend) as I see fit, writing my own paycheck as I see fit. I haven’t set the date yet – it’s 5-10 years away – but I believe that the work I’m doing now and the sacrifices I’m making now will pay off with a new level of liberty, which I will enjoy!
Of course, I will not have unlimited freedom. I will still need to live within the laws of the land and pay my electric bill if I want to keep the lights on. But I expect to have considerable freedom to travel and enjoy some leisure activities that are meaningful to me.
What are you willing to sacrifice to ensure you have the freedom you want when you retire? Check out Retirement Secure Your Future and the Ballpark Estimate of Retirement Savings Needs to move forward toward your independence day!