Useful Information from Recent Webinars- Part 1

 

Every so often, I review my personal “learning journal” and summarize notes taken from various webinars.

Below are six information nuggets that caught my eye:

 

Impact Investing- This is a big growth area in the investment world and is expected to grow. The stated intention is to have investments create change and generate a positive impact on the world- as well as a high return. Acronyms associated with impact investing include SRI (socially responsible investments) and ESG (environmental, social, and governance). Investors need to be careful about “greenwashing” (unsubstantiated claims about a company’s positive impact).

 

Widowhood Challenges- Part of many older adults’ later life will be spent living as a single person, but few couples proactively plan for this. “One size does not fit all” when it comes to a surviving spouse’s financial needs. Common challenges that affect many widows/widowers are aloneness, a lower income, increased taxes/higher tax rate filing as an individual vs. a couple, loss of services that a deceased spouse used to perform, and no longer spending time with couples.

 

Financial Infidelity- This is the term used to describe financial cheating on a partner. It includes lying about finances and debt and hiding purchases. “Red flags” to spot it include a change of status (a spouse is no longer on a joint credit card), changed passwords to online accounts, new credit card statements, a spouse no longer willing to discuss financial issues, and unexplained documents to sign. Effects include a loss of trust and broken relationships.

 

The Rise of Neobanks- Sometimes called “challenger banks,” these are fintech companies that offer banking services (checking and savings accounts) in a non-traditional (i.e., digital) way. They typically provide checking and savings accounts via a website or app. The #1 neobank is Chime, with over 13 million customers. Other neobank names are Aspiration, Current, and Varo. Most neobanks partner with chartered banks, which provides access to FDIC insurance.

 

Taxes in Retirement- Tools for tax control in later life (read: to avoid being clobbered by taxes on RMDs- required minimum distributions) include charitable giving, Roth conversions, and tax diversification (i.e., placing savings in taxable, tax-free, and tax-deferred accounts). Placing every dollar of retirement savings in tax-deferred plans can be expensive in later life as RMDs get added to other ordinary income sources such as W-2 income from a job, a pension, Social Security, interest and dividends, mutual fund capital gains distributions, and more.

 

Roth Conversions- Between now and the end of 2025 is a good time to do Roth conversions (e.g., convert a traditional IRA to a Roth IRA) because the Tax Cuts and Jobs Act was “time-boxed.” As a result, tax rates (applied to converted IRA dollar amounts) are scheduled to increase in 2026. Market downturns are also a good time to make Roth conversions. When market values bounce back later, subsequent growth in value will take place in a tax-free investment.

 

Financial knowledge is power. I hope that you found this information useful.

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.