It’s That Time Again! A Quarterly Summary of Webinar Takeaways

 

We are three-quarters of the way through 2025 and it’s time for another summary of takeaways from webinars that I have recently attended. Below are seven nuggets that stood out to me as I reviewed notes taken in my personal learning journal:

 

“Financial Winter” Analogy- What do you do when winter is coming? You prepare by getting a coat! When a “financial winter” occurs (e.g., unemployment or unexpected events that cost money), and it eventually will, your “coat” includes emergency savings and adequate insurance.

 

Index Fund Advantage- Over 20 years, only about 7% of investment professionals “beat the market” (i.e., outperform market indices) and the remaining 93% underperformed. Since most investment pros can’t get this right, there is clearly an advantage to “buying the market” with index funds that are well diversified and generally have low expense ratios.

 

Fraud Statistics- Losses to fraud in 2024 totaled about $12.5 billion and 2.6 million consumers complained to the Federal Trade Commission (FTC). The most common type of fraud was imposter scams and the second most common was online shopping scams. E-mail was the most common way that consumers reported being contacted by scammers. People age 20-29 reported losing money more often than those age 70+ but older adults lost the most money.

 

Financial Literacy Education- As of July 2025, a total of 29 states passed laws guaranteeing a standalone personal finance course for high school students. In 2011, there were only 11 states. A standalone class is like a “five course meal” of financial education and personal finance embedded in another class (like social studies, economics, or business) is like an appetizer.

 

Long-Term Care (LTC)- There are different types and levels of LTC. The greatest assistance is provided in nursing homes and the least for LTC at home. Most LTC takes place as in-home care. Ways to cover the cost of LTC include LTC insurance and self-insurance. The speaker from New York City noted that, if a nursing home costs $12,000 per month, someone would need $144,000 a year to cover the cost ($720,000 for five years). Obviously, doing this requires some planning.

 

Social Security- Nearly all (94%) of older adults claim Social Security benefits. FICA tax is 7.65% of employees’ pay or 15.3% of net business income for self-employed individuals who pay double for the employee and employer portions. Workers’ highest 35 years of earnings are used to calculate two numbers called AIME and PIA from which benefits are calculated.

 

Economic Uncertainty- The first half of 2025 was chaotic and very fast paced for the U.S. economy. The longer that uncertainty remains in place, the more likely a recession will occur. If inflation numbers go higher as a result of tariffs or other factors, it will be uncomfortable for the Federal Reserve to lower interest rates.

This post provides general personal finance or consumer decision-making information and does not address all the variables that apply to an individual’s unique situation. It does not endorse specific products or services and should not be construed as legal or financial advice. If professional assistance is required, the services of a competent professional should be sought.

 

Determinants of Investment Risk Tolerance

 

Investment risk tolerance is an individual’s ability and willingness to endure losses or fluctuations in the value of their investments. In other words, how comfortable someone is with the possibility of losing money or experiencing volatility in pursuit of potential gains.

Risk tolerance varies from person to person and is shaped by a variety of factors. Knowing your personal investment risk tolerance plays a key role in determining suitable investments. Below are six key factors that affect individuals’ mindsets about investment risks:

Age and Life Stage- Younger investors often accept more risk than older adults because they have a longer time to recover from market downturns and portfolio losses. In addition, life changes such as marriage, parenthood, or retirement may reduce willingness to take risks.

Time Horizon- Long-term goals (e.g., retirement in 30 years) support purchasing investments like stock that require a higher risk tolerance. Short-term goals (e.g., buying a car next year) require safer, less volatile investments.

Income Stability- Investors with a chance of unemployment or an irregular income may choose to invest more conservatively. Conversely, secure employment (or a pension) and a consistent, high income provides a safety net that can encourage greater investment risk.

Net Worth- An investor can afford to take more risk with a six-figure net worth (assets minus debts) than a net worth of less than $10,000 because a high net worth allows investors to absorb losses more easily. Conversely, individuals with fewer assets and/or more debt may avoid risky investments. A well-funded emergency fund can increase comfort with risk.

Investment Knowledge and Experience- Informed investors understand market trends and risks. In addition, experience with market volatility can improve comfort with risk. Novice investors, on the other hand, may be more cautious due to lack of experience and limit themselves to low-risk savings products such as money market funds and CDs.

Economic Environment- Strong financial markets often boost investor optimism and risk-taking behavior. Recessions, inflation, or geopolitical tension can cause fear and conservatism. Media coverage of economic news can also sway investor confidence.

Take the time to assess your own personal investment risk tolerance. A good tool to use is the University of Missouri’s online Investment Risk Tolerance Assessment. Remember, there is no one “right” risk tolerance. Rather, risk tolerance is personal and reflects an individual’s values, emotions, and experiences.

        

This post provides general personal finance or consumer decision-making information and does not address all the variables that apply to an individual’s unique situation. It does not endorse specific products or services and should not be construed as legal or financial advice. If professional assistance is required, the services of a competent professional should be sought.

Take-Aways From a Virtual Conference for Financial Educators

 I recently attended segments of a virtual “Back to School” conference for financial educators sponsored by Next Gen Personal Finance. About 400 educators attended one or more sessions. Below are some take-aways that stood out to me:

Tax-Deferred Retirement Savings- Savings contributions in tax-deferred plans, such as 403(b) plans used by teachers, are more critical than ever. Public sector employee pension benefits have been eroding and 13 states do not pay into Social Security to cover their employees.

 

Investment Fees- It is not enough to look at quarterly statements for your retirement savings plan (or other investments) to see how much the account balance increased. You must also look at how much was taken out in fees.

 

Three Fund Portfolio- Investors can create a globally diversified, low-cost portfolio with three index mutual funds: a total stock market index fund comprised of a wide variety of U.S. stocks, an international stock index fund, and a U.S. bond index fund.

 

Fraud Impacts- Fraud affects every generation differently and AI is an accelerant of fraudulent pitches. The #1 type of fraudulent scam for young adults is online shopping while common older adult scams include Medicare and health insurance scams, tech scams, and romance scams.

 

BNPL and Credit Scores- Buy Now, Pay Later (BNPL) debt repayments will start counting toward credit scores in late 2025. BNPL use has grown the most recently for everyday essentials like groceries, gas, and utilities. Credit scores will drop if late BNPL payments are made.

 

Gambling Trends- A total of 38 states allow online sports betting on cell phones and there is a “bro mentality” surrounding it like “if you don’t gamble, you aren’t in the game.” Online betting is rapidly growing among minors and is starting to be added to state financial education standards.

 

Financial Education- 29 states now have financial education course mandates for high school graduation. This covers about 76% of U.S. students. The state of Delaware is expected to be state #30. Financial education does not just impact students but their family members as well.

 

Four Milestones of Adulthood- The milestones have traditionally been moving out of a childhood home, stable employment, getting married, and having children. Adulting is different today and a big part of this is economic. 25 to 34 year olds are choosing different pathways.

Compound Interest- The biggest financial concept to teach young adults is the power of compound interest. People can only become disciplined savers if they can see the potential long-term accumulation of small amounts of savings. Teens also need to learn what household expenses, such as a cell phone, cost. Many are unaware of their actual monthly cost.

This post provides general personal finance or consumer decision-making information and does not address all the variables that apply to an individual’s unique situation. It does not endorse specific products or services and should not be construed as legal or financial advice. If professional assistance is required, the services of a competent professional should be sought.

Ingredients for a Fulfilling Retirement

I recently attended a webinar titled Creating a Fulfilling Retirement presented by Fidelity Investments. Below are eight of my key take-aways: 

 

Three Happiness Components- The speaker noted that money (income and wealth) is only one part of the retirement happiness equation. While happiness improves with higher earnings, especially guaranteed income like a pension or annuity, two other key factors are relationships (interestingly, a spouse and friends but not children, according to one study) and health.

 

Happiness Investments- All three retirement happiness factors (money, relationships, and time) are “investments” that require regular time allocations. For example, time for exercise and eat well and to build and maintain relationships. The greatest wealth is good health.

 

Retirement Pursuits- When people are working, their weekend activities are a getaway. In retirement, when “every day is Saturday,” they need to think about how they will fill their days. Otherwise, they can become bored, depressed, and/or isolated. A common retirement task is finding balance among different activities.

 

Spending Money- Retirement spending can be very successful if it provides an entry into socialization activities. An example of so-called “social spending” is purchasing a classic car to be able to participate in car shows and informal get togethers of car enthusiasts.

 

Congregate Living- There are different stages of aging and different mindsets associated with each one. For example, people who reach their 80s are often happier to live in shared housing arrangements for less isolation, less maintenance, and more well-being checks vs. “young old” retirees in their 60s and 70s who still prefer to live in single-family homes.

 

Long-Term Care (LTC) Need- The need for LTC is not determined by age but by life events and an inability to perform activities of daily living (ADLs). Not everybody needs LTC insurance, but everyone needs a LTC plan, including a liquidation plan to sell assets to free up money for LTC.

 

Common Errors of Retirees- Two common errors that were mentioned were underestimating health care costs (estimated to be $165,000 for 65 year olds for the remainder of their lives, excluding LTC) and underestimating irregular expenses for things like car repairs and dental bills.

 

Guaranteed Income Sources- Retirees with a “retirement paycheck” of regular monthly income from Social Security, annuities, and/or pensions that pays all of their living expenses are generally happier- and spend more money in retirement- that those who have to withdraw money from invested assets (e.g., a 401(k) plan) and worry how long their money will last.

At the end of the webinar, attendees were encouraged to "make retirement the best chapter of your life." For many people, the last third of their life is their happiest.

This post provides general personal finance or consumer decision-making information and does not address all the variables that apply to an individual’s unique situation. It does not endorse specific products or services and should not be construed as legal or financial advice. If professional assistance is required, the services of a competent professional should be sought.