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

 

It’s hard to believe that we are almost halfway through 2025. It is my custom at this time to provide 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:

Sequence of Returns Risk- This is the risk that negative market returns early in retirement can deplete retirement savings faster than anticipated, potentially leading to financial hardship. One speaker noted that “this risk is non-existent unless you are withdrawing money from savings.”

 

Flipping a Switch- It is very hard to “flip a switch” and start spending retirement savings after decades of saving. It can be emotionally difficult for super-savers and many spend only investment earnings and leave principal intact. Learn more by reading my book, Flipping a Switch.

 

Retirement Shocks- The biggest “shock” to retirees’ finances is a significant long-term care expense. Other shocks are medical and dental expenses, inflation, death of a spouse, family responsibilities, changing tax laws, gray divorce, and frailty and cognitive decline.

 

Retirement Budgeting- Ideally, retirees should use dependable income streams (e.g., a pension, annuity, rent, and Social Security) to pay fixed expenses and variable income (e.g., investment payouts) for variable expenses.

 

Taking Risks- A speaker discussed the “30 Seconds of Bravery Rule” and advised viewers to “just have 30 seconds of bravery, do the thing you fear, and ask for what you want.” The worst that can happen is that people say no.

 

Frozen Credit- Freezing your credit is one of the best security protections you can take. When you need to “thaw” your credit to apply for a loan or utility service, ask the lender which credit bureau they use so you don’t have to unfreeze all of them.

 

Financial Education- Financial education is a lifelong endeavor because there will always be new financial products and tax laws change frequently. With respect to youth financial education, 29 states now guarantee a full semester personal finance course as a high school graduation requirement.

 

Tax Season- When does tax season end? Never! Tax planning is a lifelong process and even extends beyond the grave (e.g., tax-deferred accounts inherited by beneficiaries). Tax planning is also tightly intertwined with investing and retirement planning.

 

Financial Trauma- Trauma can result from the buildup of events over time or from a single event. It is a financial stressor that people do not have resources to deal with. A good analogy is a bank account. Resources are deposits and stressors are withdrawals.

 

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.

 

Tariffs and Inflation Stressing You Out? Fight Back!

I recently taught a new class titled Inflation-Fighting Strategies For Older Adults. Little did I know when I submitted a course proposal for the class in July 2024 that the U.S inflation rate would continue to remain “sticky” and that the country would be embroiled in tariff war that is estimated to be like an average tax increase of more than $1,900 per American household in 2025. What to do?

Consider these inflation-fighting strategies:

 

Groceries- Use store brands, eat more meatless meals, stock up on sale items, eliminate high-cost, high-calorie “junk” foods, use coupons and double coupons, join supermarket rewards clubs, buy local seasonal produce, build “impulse buys” into your shopping list so you stay within budget, use grocery shopping apps, and make recipe substitutions (e.g., applesauce instead of eggs for baking).

 

Eating Out- Drink water instead of a soft drink or alcohol, share an entrée or dessert, eat appetizers as a meal, select BYOB restaurants for meals with adult beverages, take advantage of value meals and “early bird specials,” join restaurant rewards clubs, and bring take-out containers for leftovers.

 

Gasoline- Drive less by consolidating trips, use apps like GasBuddy and Waze to find cheap gas, pay with cash if gas is cheaper, join a fuel rewards program, check tire pressure and lighten loads, and carpool with others to reduce miles driven.

 

Road Trips and Vacations- Pack food and beverages in a cooler, stay at hotels with free breakfast, get hotel coupons at rest stops, travel with a group and share expenses (e.g., a beach house), travel on planes and trains at “off peak” times, join hotel and airline rewards programs, and take daycations (one-day trips) and staycations (a vacation spent in your local area instead of traveling somewhere).

 

Utilities- Adjust your thermostat to be a little warmer in summer and  cooler in winter, turn down the water heater, unplug items not in use, take advantage of off-peak hour electric rates, change HVAC system air filters regularly, wash most laundry in warm water, and empty drier lint traps.

 

Clothing- Shop department store sales and use coupons, join retailer loyalty programs to earn rewards, shop at thrift and consignment stores, shop for deals online, and make clothing repairs and alterations to extend the life of your wardrobe.

 

“Big Ticket” Items- Decide whether you can wait out inflation and “tariff turmoil” for items like cars, electronics, furniture, and houses. If not, use the Rule of Three worksheet to compare three alternative vendors for products and lenders for loans. Be sure to ask about discounts (e.g., Veterans).

 

Insurance- Play “what if” (i.e., I increased deductible, changed the policy amount, etc.) with you insurance agent, double-check policy discounts that you qualify for, shop around for coverage (using the Rule of Three), and sign up for auto-pay or online billing statements.

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.

 

Do You Need a Financial Advisor or Robo-Advisor?

I recently taught a new class titled Do You Need a Financial Advisor or Robo-Advisor? because many of my students were asking about hiring financial professionals during classes about retirement planning, investing, and income taxes.

Below are eight take-aways:

Frequency of Use- According to one study, less than half (44%) of American adults said they worked with a financial professional in 2023 but 88% said they thought that doing so would be helpful. Obviously, this is a major disconnect.

 

Common Financial Challenges- Studies indicate the following: not knowing where to start, being overwhelmed by investment choices, lack of time or expertise to manage finances, fear of making costly mistakes, and new income tax calculations such as required minimum distributions (RMDs).

 

When Financial Advisors Are Useful- Common situations include retirement planning and decumulation (spending down savings) decisions, major life transitions (e.g., widowhood and retirement), complex tax situations, and receipt of an inheritance, settlement, or large prize.

 

Benefits of Working With a Financial Advisor- Advantages include personalized financial guidance, expertise in tax planning and investments, retirement and estate planning guidance, a holistic approach to financial management, behavioral coaching to curb emotional investing mistakes, and objective “third party” insights.

 

Common Myths- One myth is that “all financial advisors are expensive.” The truth is that many offer hourly rates or flat fees that do not involve ongoing investment management expenses. A second myth is “I don’t need an advisor if I’m good at managing money.” In reality, even financial experts seek outside guidance.

 

“Alphabet Soup”- There are dozens of certifications in the personal financial planning space. Among the most widely recognized are: accredited financial counselor (AFC®), certified financial planner (CFP®), chartered financial consultant (ChFC®), certified public accountant/personal finance specialist (CPA/PFS), and chartered retirement planning counselor (CRPC®).

 

Advisor Compensation Methods- There are three main types: 1. Fee-only (advisors that charge an hourly rate, a flat fee, or a percentage of assets under management), 2. Commission-only (advisors that earn commissions by selling financial products), and 3. Fee-based- Advisors that charge a fee for advice but may also receive commissions on product sales.

Questions to Ask a Potential Financial Advisor- Here are five key questions: What are your qualifications and certifications?, How long have you been a financial advisor? What types of clients do you typically work with? Are you a fiduciary (obligated to act in clients’ best interests)?, and Have you ever been subject to any disciplinary actions?

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.

Step Down to Save Money

Recent stock market volatility and recession jitters have me thinking of a similar environment five years ago at the start of COVID-19. What I wrote then is as important today: “While we can’t control prices, we can control (somewhat) what we spend.” Not everyone is able, or will feel emotionally inclined, to “buy the dips” in stock prices, but everyone can review and tweak their spending habits.

In this tough economy with rising prices for many household expenses and stock market carnage, many people are looking for “deals.” People at all income levels are seeking ways to lower expenses so they can claw back against inflation, save money, and/or repay debt. Consider these strategies:

Consider Stepping Down- Like smoking cessation patches where nicotine is reduced gradually, “stepping down” reduces household spending in gradual stages instead of eliminating an expense completely. To visualize stepping down, imagine a staircase. On the top step is the most expensive way to buy an item and on the floor below the bottom step is the least expensive purchasing method. 

Put It Into Practice- Here’s an example of buying pancakes for breakfast. The most expensive method (top step of the staircase) would be going to a “sit-down” restaurant. The next step down would be to buy pancakes at a fast food outlet. Go down two steps  and you can buy frozen pancakes at a supermarket and, three steps down, pancakes prepared with a mix. At the “floor” of the staircase would be the cheapest method still: pancakes prepared “from scratch” (i.e., dry ingredients).

Keep On Going- “Stepping down” can also refer to the frequency or amount of a purchase as well as where it is made. For example, you may decide to eat out two or three times a month instead of five or six. You’re not completely eliminating what is obviously a pleasurable activity. You’re simply taking steps to reduce the cost. Or you might “step down” by eliminating an appetizer, drink and/or dessert when you eat out. Again, you’re still enjoying a restaurant meal, but doing so for less money.

Step Down Shopping Venues- “Stepping down” works best with “discretionary” expenses that are not locked in. Examples include clothing, shoes, gifts, home furnishings, toys, housewares, and travel. Steps of spending, from top to bottom, might include shopping high-end retailers, mid-level price department stores, discount stores, factory outlets, consignment stores, and thrift shops, flea markets, and garage sales. Again, the more steps someone goes down, the greater the likely savings. 

Be a Thrifty Shopper- Many thrift stores are operated by non-profit organization fund-raisers and are a win-win-win-win: donors get rid of items they no longer need, shoppers get great bargains, a non-profit agency gets needed cash, and less stuff ends up in landfills. Some thrift shops have “dollar racks” and end-of-season bag sales. I volunteer at a thrift shop and am constantly amazed at the wonderful items (all donated) that are available for sale at a fraction of their original price. I also went on a thrift shop trail recently with friends and bought home a haul of nine items that cost $22.

Now is a tough time to be a consumer with the impacts of tariffs and inflation. The next time you want to buy something, consider “stepping down” and visiting a local thrift or consignment store. 

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.