First Quarter Summary of Webinar Take-Aways

 

We are already one-quarter of the way through 2026 and it’s time for another summary of takeaways from webinars that I have recently attended. Below are nine nuggets that stood out to me as I reviewed notes taken in my personal learning journal:

Retirement Challenges- Retirement is more of an adaptive challenge than a technical one. With adaptive challenges, there is no expert to help you. Rather, it is up to retirees to look inside themselves to determine their purpose and what brings them joy.

 

Non-Financial Changes- Many retirees face the following: Loss of work identity and a sense of purpose, increase in unstructured time (about 2,500 hours per year), increased time with spouse or partner, reduced social connections outside of work, and health challenges from the aging process.

 

Retirement Resources: Eight things can help retirees thrive: 1. Spirit (meaning and purpose), 2. Physical health, 3. Heart (optimism and resilience), 4. Connection (nurturing relationships), 5. Mind (creativity and mental challenges), 6. Work (paid or volunteer) to contribute personal talents, 7. Place (having a “sense of home,” and 8. Money (managing resources to live within your means).

 

Relationships- The greatest satisfaction in life comes from relationships. Think of relationships as an investment portfolio that requires ongoing deposits and maintenance and will change over time. Time is a finite resource so ask yourself what investments you want to make in different people.

 

Sequence of Returns Risk- Losses in an investment portfolio early in retirement is a risk that cannot be diversified away from. To avoid withdrawals from equity assets during a market downturn, spend conservatively and/or meet spending needs from other sources (e.g., cash asset buffer account). Big caution: retirees’ income plan should not overly rely on market performance.

 

Financial Education- 30 states have passed laws requiring a semester-long financial education course for high school graduation. The true ROI of these courses is what students do with the knowledge they gain (e.g., early investing, less debt) and expanded horizons for their future.

 

Wealth Accumulation- Wealth is what people don’t see. Everything can be bought with borrowed money. It is not what people earn that creates wealth but how they spend it. Money is not a goal in and of itself but a tool to allow you to reach lifetime financial goals.

 

Tax Planning- A “permanent” tax law change is one that is not set to expire. Congress can always pass future tax laws. Three ways to lower modified adjusted gross income to reduce taxes are tax-deferred plan contributions, Roth conversions, and qualified charitable distributions (QCDs) after age 70 ½. Some people roll an employer account balance into a traditional IRA to make a QCD later.

 

LinkedIn Tips- LinkedIn is the #1 way that people find jobs and “put themselves out there.” Ways to stand out on LinkedIn include a professional head shot, an interesting “About” section, highlighting your skills and experience, regularly posting new content, a customized URL, endorsements, and completing as many profile sections as possible.

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.

Credit: A Building Block for Building Wealth

 

I recently participated in an Experian #creditchat titled Building Wealth, Not Just Credit: How Credit Fits into Long-Term Financial Success. Its purpose was to explore how credit can be used as a building block for wealth accumulation over time.

Below are the seven questions that were asked and my responses:

What does “building wealth” mean to you, and how does credit play a role in that journey?

Building wealth means gradually increasing your net worth over time by increasing assets, reducing debts, or both. Wealth-building is slow in your 20s/30s but is impressive as investments grow. A good analogy is the progression of prizes on the Who Wants to Be a Millionaire? game show.

 

When you think about credit beyond approval/denial, what role does it play in long-term wealth creation?

Credit provides leverage to use OPM (other people’s money) to buy appreciating assets. Case Example #1: A mortgage. Most people need to borrow money to buy a home that increases in value over time. Case Example #2: Student loans to build human capital to earn a good income.

 

What’s are common myths about credit that actually holds people back financially?

Myth: “Checking my credit score hurts it.” Checking your own credit is a soft inquiry and doesn’t affect your score at all. Not checking your credit history can let errors linger for years. Myth: “I should avoid credit cards entirely.” Actually, avoiding them can hurt your credit history. Responsible use (small charges, paid in full) builds a positive track record.

 

What role does financial education play in helping consumers use credit as a wealth-building tool?

A substantial body of research shows that financial knowledge and skills influence financial decisions that help shape wealth outcomes. Examples of financial education impact include higher credit scores, fewer defaults, and higher savings

 

How can building credit early impact financial success later in life?

Good credit helps people qualify for loans and perhaps a job and lower insurance premiums. Also, it is difficult to travel for business without a credit card, which could hinder your career. Finally, lower interest associated with good credit can save tens or even hundreds of thousands of dollars over time

 

How can having access to credit at the right time influence wealth-building opportunities?

Many wealth-building opportunities are time-sensitive. Credit allows people to act when opportunities appear. Also, credit can accelerate compound interest. The earlier someone acquires an appreciating asset, the longer it has to grow.

 

What is one piece of advice about handling credit for your younger self?

Build a positive credit history by making payments on time and in full and keeping balances low.

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.

Steps to Living a Risk-Reduced Life

 

Health and wealth are key resources for a happy and successful life. People in poor health often die young and spend money that could have been invested on health care costs. 

On the other hand, those who practice recommended health behaviors are more likely to exceed average life expectancy and need a nest egg large enough to insure that they don’t outlive their assets.

Poor health and financial outcomes are often couched in vague risk-based terms such as “you are at increased risk for” (heart disease, cancer, outliving your assets, etc.). People see “you’re at increased risk for” warnings and tune them out. Why? Risk warnings are rarely personalized.  We are told that we are “at risk for’ so many things that many people simply “freeze” and do nothing.

While nobody can live a risk-free life, everyone can take actions to limit the amount of risk we are exposed to. These strategies are often shaped by life experiences and expert recommendations. Below are 20 risk-reduction strategies that I personally use.

Car Parking- I park my car on the outer edges of parking lots to avoid getting scratches and dents and for exercise.

Credit Cards- Nobody takes my credit card so I pay cash at restaurants without a cash register. Privacy trumps points.

Decision Rules- I avoid answering phone calls from unknown callers and let them go to voicemail.

Debit Card- I have never had one to reduce the risk of someone wiping out my checking account.

Diet- Since having breast cancer, I’ve been a pescatarian and drink less than one drink a week.

Drive Bys- My husband and I do test drives together to find destinations that one of us has to drive to alone.

Driving- I stay home or wait out heavy rain storms to avoid accidents while driving in bad weather.

Fitness- I typically walk 10,000 steps per day and have never smoked or used illegal drugs.

Hand Washing- I wash my hands frequently to avoid the risk of a cold, flu, COVID, etc.

Income Taxes- I use IRS safe harbor rules to avoid the risk of owing an underwithholding penalty.

Index Funds- I invest in a low expense total stock market index fund to track market returns.

Mail Use- I avoid mailing things and instead use automated payments and online bill pay.

Mask Use- I wear a mask in crowds, in airports, and on planes (same reason as hand-washing).

Leave It Alone- If something is not broken or absolutely necessary, I typically don’t fix it.

Screening Exams and Vaccinations- I do these to reduce the risk of bad health outcomes.

Smart Car Features- I drive a car with a back-up camera and alerts when you are backing up and getting close to things.

Solopreneurship- Earnings from my company are a supplement to guaranteed sources of income.

Stress- I avoid stressful events that I have no control over, including potentially difficult clients.

Text Alerts and Secondary Email Addresses- I want to be alerted about bank and credit card account transactions.

Uniball Gel Pens- When I do use checks, I use pens with special ink to reduce the risk of check washing.

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.

What to Do After You File Your Tax Return

Whew! You or your tax preparer just pressed “send” and your tax return is off through the ether to the IRS. “I’m done with taxes for another year,” you say to yourself. Not so fast! Tax-planning is a year-round proposition and there is a lot you can do to be prepared for next year.

Below are nine steps to take after filing your tax return:

Learn From Your Return- It is smart to look beyond the amount of tax that you owed. Review your effective tax rate (the percentage of your income paid in taxes, calculated by dividing your tax paid by your taxable income), biggest deductions and credits, and largest income sources.

Ask Yourself Some Questions- Document “lessons learned” during this tax season to inform tax planning for next year. Write down: what surprised you (e.g., blind spots that you hadn’t considered), what was stressful, and what worked well to turn this year’s tax filing into a feedback loop.

Make a List of Carryovers- These are tax write-offs that you can use on future tax returns. Keep a running list and write them down so they don’t get forgotten next year. Think capital loss carryforwards and charitable donation carryovers.

Adjust Payroll Tax Withholding- This also goes for quarterly estimated tax payments and withholding for pensions and Social Security. If you owed a lot on your 2025 tax return, received a large refund, or expect big changes to your income in 2026, tweak your withholding now.

Review Itemized Deduction Potential- Itemizing deductions is generally not possible without proactive tax planning because the standard deduction is a very high hurdle to exceed. Consider bunching charitable donations, state and local taxes, and medical expenses to be able to itemize.

Consider Lifestyle Changes- Life events that can change the amount of future tax owed include marriage, divorce, widowhood, job changes, retirement, and relocation. These events should prompt proactive planning and not big surprises.

Update Your Record-Keeping Systems- Set up a system to organize documents related to 2026 income taxes if you had messy records before. This includes business mileage logs and receipts and documentation for tax write-offs (e.g., child and dependent care tax credit).

Schedule a Mid-Year Tax Check-Up- By July or August, you will have more clarity about your expected income and expenses than you do in February. Use this information to prepare a pro forma (projected) tax return so you can adjust tax planning strategies before it is too late.

Evaluate Capital Gains Exposure- Study your 1040 Form and consider where most of your tax bill came from. If capital gains are triggering a lot of tax, consider whether you have high turnover investments and concentrated positions. Try to purchase tax-efficient investments instead.

Bottom Line: A tax return provides a lens into your overall financial situation. Study it for insights that may lower your tax bill in the future. If you are working with a financial advisor, share it as an informational tool. Be proactive and don’t put taxes on the back burner until next year. 

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.

Barbservations from a Seminar about Annuities

 

Every once in a while, I attend a free financial seminar in my neighborhood. Going to these meetings provides content for blog posts and insights into the financial concerns and misperceptions of older adults. I then incorporate this information into my classes. Occasionally, I also get a free meal.

Recently, I attended a meal-free seminar about annuities. Below are some Barbservations:

 

Long Introduction- Fully one-third (20 minutes) of the 60-minute program was a lengthy description of the sponsoring company and its key staff.

 

Helpful Handout- The speaker distributed a very useful “one-stop” tax summary document, similar to this one, that contains all the 2026 numbers relating to income taxes and Social Security.

 

Business Model- The speakers earn income by charging a fee for assets under management (AUM) and mentioned a 1.2% base AUM fee with a lower percentage charged for higher wealth tiers.

 

Poor Educational Presentation- There were no PowerPoint slides. Instead, the speaker feverishly wrote numbers on newsprint paper and talked very quickly. In short, the talk was hard to follow.

 

I teach a class, myself, about annuities so it was difficult not to “fact-check” the presentation. Below were some “nuggets" that stood out to me as correct and useful information:

 

Annuities are a Tool- Annuities are neither good nor bad and they are not right for everyone. Also, they are both simple (give an insurance company money in exchange for a future stream of income) and complex (complicated features). Every contract is different, making “apples-to-apples comparisons difficulty.

 

Fixed Annuity Features- Fixed annuities are like CDs, but tax-deferred. When money is withdrawn, it is taxed as regular income. Initial returns are locked in for a certain period of time (e.g., 5, 7, or 10 years) and then fluctuate with market conditions. Look for a decent “floor” for downside protection.

 

Government Backing- There is no federal government insurance like FDIC backing annuities. Instead, there are state-administered guaranteed associations. In Florida, annuities are insured by the Florida Life & Health Insurance Guaranty Association (FLAHIGA), which covers up to $250,000 per owner per member company.

 

Indexed Annuity Caps- Annuities tied to an equity market index have caps, which are essentially fees because they reduce investment earnings. The example that was given was, if 2% is the maximum you can earn on an index annuity and the market returned 12%, the “fee” is 10%.

Risk-Free Investing- There is no such thing as a risk-free investment. All investments have some type of risk. When communicating with a financial advisor about risk, don’t say “I don’t want any risk.” Instead, say “I want as little risk as possible” and acknowledge that risk exists.

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.