My Key Takeaways from #AFCPE2025

I recently attended the 2025 Association for Financial Planning and Counseling Education (AFCPE) Symposium in Glendale, AZ.

Below are nuggets from sessions that I participated in:

 

Financial Health and Capability- There was a sharp decline in 2024 in Americans’ ability to make ends meet. The decrease was mainly driven by middle and upper income households. Not surprisingly, there was an improvement in knowledge about inflation, especially among younger adults. Less than half (46%) of U.S. adults have three months of expenses saved for emergencies.

 

Financial Conversations- Keynote speaker Riaz Meghji noted that “We are one conversation away from a different life.” In other words, interpersonal connections matter. He challenged attendees to recall a defining conversation that changed their life and to remember that if they say “yes” to something that costs money or time, they are also saying “no” to alternative options.

 

Hyperbolic Discounting- This is a cognitive shortcut (bias) where people attach more value to the present than the future, prefer smaller rewards now vs. a larger reward later, and tend to be impulsive. Hyperbolic discounting makes the future “feel cheaper” than it is and can be mitigated with precommitment strategies, goal partitioning, choice architecture, and future self exercises.

 

AI and Tax Preparation- A study of the use of ChatGPT in preparing income taxes was presented. Bottom line: it worked well for a very simple case but provided faulty responses with more complex situations. AI operators must tell AI to evaluate their eligibility for tax deductions and credits. When mistakes are caught and noted in follow-up prompts, AI output gets better.

 

Theory of Planned Behavior- This theory states that, when people have an intention to complete a task, action is more likely to take place. Research findings were presented that showed a positive relationship between attitude toward estate planning and intention to prepare an estate plan. An estimated $84 trillion of wealth is expected to be transferred by 2045.

 

Financial Cost of Dementia- 7.2 million Americans live with Alzheimer’s disease and the lifetime risk at age 45 is 20% of women and 10% of men. Financial mismanagement is an early indicator of cognitive decline (e.g., missed payments, double payments, spending extravagantly). AARP has a “dementia hub” with resources about interacting with people with dementia.

 

Financial Trauma- Financial trauma is any instance, observed or experienced, that has a negative impact on the way someone views, interacts with, or believes about money. Sources include generational influences, poverty, and systemic factors. Trauma is not a personal issue, but a societal one. No one makes bad financial decisions. They do the best that they can in the moment.

 

Grief to Growth- Widowed individuals each grieve in their own way. While there is no timetable for the grieving process, a speaker on a panel suggested grouping follow-up tasks following a death into three categories: Now (e.g., notifying Social Security), Soon (e.g., reviewing financial documents), and Later (e.g., making big decisions like selling assets and moving).

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 Panel Discussion About Retirement

 

I recently attended a webinar about retirement planning that featured a panel of four retired Cooperative Extension educators who did the same type of community education work that I did when I worked for Rutgers Cooperative Extension in New Jersey.

 

Below are my key take-aways:

 

Retire to Something- Everyone on the panel concurred that it is wise to have a post-career plan before you retire, especially after an impactful and time-intensive career. Whether it is working part time, volunteering, starting a business, traveling, or care-giving, the choice is up to you.

 

Schedule “Me Time”- It is easy to get sucked into too many commitments after leaving a full-time job. Everyone just assumes that “you have the time.” It is important to schedule time for yourself and protect your schedule.

 

Do Retirement Savings Calculations- Several panelists noted that they could have retired sooner than they actually did and advised the audience to put some effort into calculating what you need to save during your working years to have “enough” in later life.

 

Prepare for an Orderly Exit- Clean out paper work files and decide what needs to stay at your workplace or what can be copied or scanned for personal use later. This is especially true if you plan to leverage your skills through a post-retirement encore career or entrepreneurship.

 

Buy a Personal Computer- Several panelists had previously only used a computer that belonged to their employer. They spoke about the importance of buying your own laptop or desktop to transfer important files to. Another way to do transfer files is using an external hard drive.

 

Consider Entrepreneurship- Several panelists started post-retirement businesses for meaning and purpose and structure to their day as well as income. Some also were not covered by Social Security during their primary career and started a business to earn Social Security quarters of coverage or to increase their benefits by replacing “0” or low-earning years with higher earnings.

 

Help Your Successors- Not everyone on the panel had a named replacement for their position when they retired. A few did. Either way, panelists recommended leaving an “orientation” letter and a jump drive with important files for their successor.

 

Use Your Leave Time- Take all your vacation days and a sabbatical, if possible, while you are working. Long stretches of time off will prepare you to be away from the office and test family relationships with an extended period of closeness.

 

Don’t Worry About Being Replaced- Every panelist recommended retiring when the time is right for you. Your employer will continue your work responsibilities…or not. That is not your problem. Don’t work longer than you want just to “save” your program or department.

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.

Effective Debt Solutions

 

I recently attended a webinar titled Safe and Effective Debt Solutions presented by the Foundation for Financial Planning. Below are seven key take-aways:

 

Debt Statistics- In early 2025, Americans collectively owed approximately $1.2 trillion on their credit cards and almost half (48%) of credit card holders had revolving debt, which means they pay interest on their outstanding balance. Credit card interest rates currently average over 20% and it can often take 20+ years to repay outstanding balances with small minimum payments.

 

Avalanche and Snowball Methods- These are popular strategies for paying down debt with additional payments beyond required minimum payment. The avalanche method prioritizes paying off debts with the highest interest rates first, while the snowball method focuses on paying off the smallest debts first, regardless of interest rate. Unfortunately, these two methods are not useful for people with very tight cash flow and no extra income to apply toward outstanding debt.

 

Essential Data- Borrowers with outstanding debt need to assess their financial situation to develop a plan to move forward. This includes compiling a list of secured and unsecured debts and their balances, checking their credit report and score, and making a list of overdue accounts.

 

Consumer Debt-to-Income Ratio- This is another key piece of information that measures the percentage of a person's net (take-home) income used to pay consumer debts, such as credit cards, auto loans, student loans, and personal loans. A lower ratio suggests financial stability, while a higher ratio indicates financial strain. Most lenders prefer this ratio to be below 20%.

 

Confusing Terminology- Many people confuse debt settlement services by for-profit companies with debt management programs (DMPs) by non-profit organizations. DMPs typically plan for a “debt free date” in three to five years and require clients to have positive cash flow and to close or stop using their credit card accounts. An administrative fee is deducted from monthly payments to the sponsoring non-profit organization which are pro-rated among clients’ existing creditors.

 

Due Diligence- Webinar attendees were encouraged to research the reputation of credit counseling agencies that offer DMPs and to choose certified NFCC non-profits. The National Foundation for Credit Counseling (NFCC) is the largest nonprofit network of certified credit counseling agencies in the U.S. and sets industry standards and accredits financial counselors.

 

Debt Consolidation Loans- There are pros and cons. An advantage is the potential for a lower interest rate than, say, the APR charged on credit cards. A risk is that overall debt will increase if people make purchases on credit cards that were paid off with a debt consolidation loan. This quote from the webinar says it all: “You can’t get out of a hole by digging it deeper.”

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 Retirement 101 Webinar

I recently attended a Retirement 101 webinar sponsored by the New York Public Library called Retirement Planning 101: Strategies to Maximize Your Life in Retirement. The webinar included content about retirement planning, investments, building wealth, retirement income streams (e.g., Social Security, pension, investment withdrawals), health care costs, and long-term care.

Below are eight of my key take-aways:

Meanings of Retirement- Everyone has their own personal definition but some common themes related to a “good retirement” are financial freedom (not relying on employment income), lifestyle choices (freedom to do what you want), security and independence (adequate resources to handle life events), and legacy (opportunity to leave behind support for heirs and charities).

Benefits of Early Saving- Compound interest and time are your greatest allies. Starting even a small retirement account in your 20s or 30s dramatically increases your savings nest egg and  reduces the amount needed to save in later life. An investment of $250 per month earning a 7% annual return starting at ages 25 and 35 would be worth $656,000 and $304,000, respectively.

Overcoming Barriers- Some people say, “I don’t earn enough to save.” The solution is to start small. Even modest savings can grow significantly over time. Other people say, “I have to pay off debt first.” The solution is to balance debt repayment with retirement savings, especially if an employer matches retirement plan contributions.

Investment Vehicles- There are several places where people can save for retirement including employer-sponsored plans (e.g., 401(k), 403(b), TSP), individual retirement accounts (IRAs), and personal investment (i.e., brokerage) accounts. Advantages include potential employer matches (employer accounts), tax benefits, and long-term growth.

Reinvested Investment Earnings- When you reinvest dividends and capital gains earned on investments (e.g., stock mutual funds), you generate returns on those returns via compounding. Over time, compounding can significantly boost the overall return on an investor’s portfolio.

Retirement Income Sources- Defined benefit plans (pensions), which are less common than decades ago, pay a specific monthly benefit for life determined by a formula based on salary and years of service. Defined contribution plans (e.g., 401(k)s) allow workers to voluntarily contribute a set percentage of income to a personal retirement savings account that must be managed when they retire. Some workers convert their accumulated balance into an annuity at retirement.

Investment Withdrawal Methods- Common methods to withdraw retirement savings to avoid running out of money include the 4% Rule, a bucket strategy (assets segmented into “buckets” (groups) for short-term, mid-term, and long-term goals), and using required minimum distributions (RMDs) as a withdrawal strategy after age 73 or 75 (depending on year of birth).

Long-Term Care (LTC) Planning- LTC is the need for help with activities of daily living (e.g., eating, bathing, and dressing). Costs vary by state and level of care (e.g., assisted living, nursing home). Options to cover LTC expenses include LTC insurance, hybrid LTC insurance (life insurance with a LTC rider), self-funding, and Medicaid, if applicable.

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.