Take-Aways From A Retirement 101 Seminar

 

I recently attended a Retirement 101 presentation at the community where I live. Truth be told, I went “undercover” to a free dinner seminar with several neighbors. 

My objectives were 1. To observe what older adults were being told about finances and what questions were on their mind, 2. To gather content for this blog post, and 3.To bring home a pulled pork dinner for my husband.

 Below are some key take-aways:

Financial Preferences- The presenter noted the following preferences among the older adults that he works with: 1. Less financial risk and more security, 2. A desire to lower taxes, 3. Simplicity and safety, 4. Reliable income now and later, and 5. “Fun” money for travel and entertainment.

Health and Money- Stress about finances (e.g., unpaid bills, running out of money, inflation, high tax bills) can affect overall physical health and reduce someone’s enjoyment of their later life years. Most people have no financial plan to guide their future.

Investment Characteristics- Bank accounts provide liquidity and are well-suited for emergency funds and short-term goals. Brokerage accounts include equities (stocks, mutual funds, exchange-traded funds) with growth potential. Annuities provide guaranteed income and life insurance provides a tax-free death benefit.

Three Types of Plans- Retirees need three types of plans: an income plan, a tax plan, and an estate plan. An income plan is needed to protect future income against inflation and address the income loss that occurs when one spouse in a married couple passes away.

Income Reduction Example- John and Jane currently have a $81,600 annual income: $30,000 (John’s pension), $24,000 (John’s Social Security), $9,600 (Jane’s pension), and $18,000 (Jane’s Social Security) for a total of $81,600. If John dies first and Jane receives half his pension and his full Social Security, her income would be $15,000 + $24,000 + $9,600 or $48,600, a 40% cut.

Long-Term Care- People need a plan to cover potential long-term care expenses, which are not covered by Medicare or Medigap supplemental plans. Recent average national annual costs for a nursing home, assisted living, and in-home care are $120,154, $53,088, and $50,918, respectively.

Inherited IRAs- When a surviving spouse inherits an individual retirement account (IRA) from a deceased spouse, the best option is generally to assume it and treat funds in the account as his or her own. Non-spouses have until December 31 of the 10^th year after the original owners death to withdraw the funds in an inherited IRA.

Bypassing Probate- Strategies to avoid probate include owning an asset with someone in joint tenancy with right of survivorship, payable on death (PoD) designations on bank accounts, Transfer on Death (ToD) designations on brokerage accounts, and beneficiary designations on assets such as life insurance policies, annuities, and retirement savings plans.

Adding Children’s Names to Accounts- This is rarely a good idea. Heirs lose the stepped-up basis that they would receive if the account was transferred following the account owner’s death. Also, adding a child’s name puts assets at risk during the account owner’s lifetime (e.g., creditors and lawsuits).

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.

 

The Rule of Three: A Personal Case Study

In the summer of 2025, residents of my Florida age 55+ community neighborhood found out that we had defective shingles installed on the roofs of our six-to-seven year old homes.

 

For the past eight months, we have been on a six-step odyssey to 1. file a claim with the shingles manufacturer, TAMKO, 2. send TAMKO photos and shingle samples, 3. get our roofs inspected by TAMKO, 4. receive a settlement check (or not), 5. select a roofing company, and 6. get a new roof installed. Some neighbors were denied a monetary settlement because they were second owners or their roofs “were not damaged enough.”

 

As part of the claims settlement process, we had to hire a roofing company to take photos of our roof and remove and replace two shingle strips, which we then mailed to TAMKO in a big plastic sleeve. TAMKO then sent an inspector to personally examine our roof as a check against someone mailing them more damaged shingles than they really have.

 

We were one of the fortunate ones and received a cash settlement. Our roof was deemed “damaged enough.” We then moved on to selecting a roofing company to install a new roof. Since this was a big (~$20,000) purchase and we were unfamiliar with local contractors, I used the “Rule of Three.”

 

With the Rule of Three, you compare the features of three competing product or service vendors head-to-head with respect to criteria that matter to you. In other words, an “apples-to-apples” comparison. It works best for large occasional purchases. The last time I used the Rule of Three was selecting a septic system repair company in New Jersey to sell our home in 2019.

 

I used the Rule of Three worksheet that I developed years ago for financial education classes. Listed below are the search criteria that I used to select a new roof installer:

 

• §  Price
• §  Included and excluded services
• §  Brand of shingles used and its warranty
• §  Available Veteran’s discount
• §  Company responsiveness (or not)
• §  Workmanship warranty length
• §  Credit card merchant’s fee
• §  Company certifications
• §  Other observations (e.g., informational materials and ability to negotiate terms)

Once I collected roofing company contract proposals and cost estimates, I completed a Rule of Three worksheet and summarized the data in one place. Next, I highlighted good features (e.g., ten year workmanship warranty vs. five years) and bad features (e.g., requiring customers to remove lightning rods and satellites on their roof vs. including this as a service). The highlighted items helped determine my optimal choice, which turned out to be the middle price point.

Got a big purchase coming up? Use the Rule of Three to narrow down your options.

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.

Should I Stay or Should I Go?

 

Where will you live in later life? When someone leaves a job after decades of work, they are technically free to live anywhere. Assuming they have the financial resources to make a move, this begs the question made famous by the British rock band, The Clash: Should I Stay or Should I Go?

 

Some people will ask themselves this question several times throughout their remaining lifetime. For example, they might consider a move to a 55+ community in a warmer climate in their 50s or 60s and later move to assisted living, a CCRC, or near an adult child, in their 70s, 80s, or 90s.

Below are six things to consider about uprooting yourself to live elsewhere:

 

Weigh the Pros and Cons- Make an old-school matrix with four squares: pros and cons of staying and pros and cons of moving. Think taxes, weather, and proximity to a support system. In addition. read articles about “Best Places to Retire” but note that each source defines “best” differently, so pay attention to the metrics that they use. Financially speaking, how well people live in retirement depends on their income and the local cost of living.

Do Pre-Move Research- Visit potential relocation sites during different seasons and follow their local news online via newspaper websites and social media. Consider factors including affordability, amenities, health care quality, safety, weather, potential for natural disasters (e.g., wildfires and hurricanes), and culture (both the arts/entertainment kind and politics).

Consider Family Implications- Think downstream about implications of long-distance moving. You are, de facto, requiring your children/family to spend their money and vacation time to travel for visits (or they will make few visits if they cannot afford it). Also, the potential for long-distance caregiving in 20 to 30 years, or the possibly of moving you back into their home when you become frail. Most families never discuss these issues at the time of a parent’s move.

Consider Family Expectations- Define expectations of “togetherness” if you move to live near a child and the role you will play in the lives of children and grandchildren (e.g., frequency of visits and boundaries for caregiving). You want to have an honest conversation because a lot is riding on what is said. Also, consider what to do if a child that you follow has to move. Do you want to become a “trailing parent?”

Build Strong Relationships- Invest the time required to build social capital with family and friends. Aging is difficult without people to help with life’s inevitable challenges and research suggests “you can’t go back home again” without strong family relationships. The strength of family ties with children determines whether a return move is considered. Budget for routine trips back home to reconnect with loved ones.

Weigh the Trade-Offs- Consider advantages of staying put including familiarity (e.g., friends, family, doctors, churches, and community groups), no need to downsize (at least not yet!), and pride of ownership for an existing home. Conversely, moving also has advantages including a fresh start, a community of peers and organized social activities (e.g., at age 55+ communities), cost savings (e.g., moving to a state with lower living costs and/or no income taxes), and better weather.

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.

 

Navigating Fintech and Financial Fraud

I recently attended a webinar about investment fraud sponsored by OneOp. The speakers were from the U.S. Securities and Exchange Commission (SEC). Below are six key take-aways:

FinTech Platforms-Financial technology (FinTech) is increasingly being used for banking, lending, bill payments, and wealth management. Investment advisory platforms typically include an initial assessment through an online questionnaire (e.g., goals, age), automated portfolio recommendations, and automated management. Fees/commissions vary widely among providers. SEC-registered platforms are subject to examinations and enforcement and have SIPC insurance against insolvency.

 

Online Gambling- Research suggests money spent on online sports betting overwhelmingly comes from money that was previously spent on more stable, long-term investments like retirement savings accounts. One study found that bettors spent, on average, $1,100 per year on online bets. For every dollar spent on betting, bettors put $2 fewer into investments. The study author (Scott Baker, Northwestern University) concluded “Bettors are looking for the big win at the expense of savings.”

 

Modern Twists on Old Scams- Fraudulent individuals or public companies may use the promise of artificial intelligence (AI) and emerging technologies to lure investors. Bad actors love to use the latest trends or events to promote outright frauds. Watch out for heavily promoted microcap stocks that may be the focal point of a “pump and dump” scam. Also beware of messages claiming to come from companies and government agencies. AI makes it easy to clone voices and make fake videos.

 

Advantages of Diversification- Diversification can lower the risk of investing. If a single company or sector loses value, exposure to other investments may limit their losses. Broadly diversified, low fee index mutual funds or exchange-traded funds and target date funds are easy ways to achieve diversification. For example, the Standard & Poor’s 500 index tracks the 500 largest U.S. publicly traded companies and total stock market funds offer even broader diversification.

 

Market Timing- Market timing (i.e., moving money in and out of the stock market to try to track high and low prices) is difficult and expensive. A Library of Congress study found that active traders are more likely to underperform the market. In addition, frequent traders typically pay higher taxes than investors with long term “buy and hold” investments. The best and worst days in the stock market tend to happen close together.

 

Account Protection- The SEC offered the following advice to protect online accounts from fraud: pick strong passwords and keep them secure, use multi-factor authentication (e.g., texted or e-mailed codes) or biometric safeguards (e.g., facial characteristics, fingerprints, retinas, and voices), and turn on account alerts. Also, avoid using public wifi for online access, be careful clicking on links, and beware of relationship scams and affinity fraud scams that target specific groups.

 

For additional information about investing and investment fraud, visit www.investor.gov.

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.

 

Crucial Steps to Take When Retiring

I recently attended a webinar about preparation for retirement. The speaker was nationally renowned retirement planning expert Dr. Wade Pfau, author of Retirement Planning Guidebook. Below are six of my key take-aways from his presentation:

Know Your Style- Your retirement income style describes your retirement income preferences. According to Dr. Pfau’s RISA® tool, Probability-Based vs. Safety-First indicates whether someone is more comfortable relying on market growth potential or on contractual guarantees (e.g., pension, annuity). Optionality vs. Commitment indicates whether someone values flexibility to adjust their plan or prefers to commit to a structured, potentially irrevocable, retirement income strategy.

 

Inventory Your Assets- To see where you stand, create a master inventory of assets and debts, including account numbers, account values, ownership details (e.g., individual or joint tenancy with right of survivorship), beneficiary designations, and probate status. Calculate net worth by subtracting the value of debts from assets and update it annually. Request in-force illustrations of the cash value of whole life insurance policies.

 

Establish Decision-Making Authority- An advance directive is a legal document outlining your healthcare wishes if you cannot speak for yourself. A living Will is a written statement detailing which medical treatments you consent to or refuse (such as ventilation, artificial nutrition, or CPR) in end-of-life scenarios. A financial durable power of attorney is a legal document that allows you to appoint a trusted person or organization to manage your financial affairs.

 

Create an Estate Plan- Write and periodically review and/or update a will that designates to whom your assets will go. Be sure that there are no conflicts between provisions in your will and asset ownership titles, which have priority. The four essential estate planning documents are generally considered to be a last will and testament (will), a durable power of attorney (for finances), a healthcare power of attorney (or proxy), and a living will. Some people also use trusts.

 

Study Social Security Claiming Options- Higher earners in a couple may consider delaying Social Security benefits up to age 70 for a higher future benefit for both themselves and their lower-earning spouse (survivor benefits). Delayed retirement credits of 8% a year are available between full retirement age and age 70. It is smart to verify your Social Security covered earnings annually by setting up an account at https://www.ssa.gov/myaccount/.

 

Plan Ahead for Spending Shocks- Some of the most common spending shocks that older adults face are sequence of returns risk, inflation, long-term care expenses, death of a spouse, family responsibilities, frailty in later life, cognitive decline, and forced early retirement. About half of retirees do not pick their retirement date- it is forced upon them.

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.

 

The webinar ended by describing 4 Ls of retirement: Longevity, Lifestyle, Legacy, and Liquidity.