Cathy Curtis

S4E5: The Insurance Lady Ruth Stroup Answers Your Biggest Questions About Insurance

The Insurance Lady Answers Your Biggest Questions About Insurance

Your Biggest Questions About Insurance Answered

My guest on today’s episode is Ruth Stroup. Ruth, AKA “The Insurance Lady,” is a Farmer’s agent in Oakland, California. Voted Best of Oakland seven times, The Ruth Stroup Insurance Agency is a community-oriented agency offering customized insurance solutions to businesses and families.

In this episode, Ruth and I discuss all things insurance, from what it covers and doesn’t cover to choosing the right policies and the obstacles that can get in the way of that. Specifically, we talk about wildfire risk in Northern California and how it may cause you to lose your homeowner’s insurance or your premiums to skyrocket. We also discuss what Ruth can and can’t do as an agent to help her clients navigate claims.

Later in the episode, Ruth provides a helpful overview of umbrella insurance, including common misconceptions about what it covers and how to determine if you need additional coverage. She also shares a little-known strategy she uses with her high-earning clients to protect their personal assets.

And be sure to listen to the end, when we talk briefly about earthquake insurance, another potential risk factor for California residents, and many of the common misconceptions surrounding it. Ruth also shares her tips for how she believes people should approach earthquake insurance and how to decide if it’s worth the high premiums.

And lastly, Ruth offers her response to people who believe insurance is just a racket. I learned so much during this conversation and Ruth shared so many great gems that I believe will benefit a lot of you listeners. I hope you enjoy the episode as much as I did.

Episode Highlights

  • [04:02] Ruth Stroup explains what homeowner’s insurance covers and doesn’t cover if someone burglarizes your home.

  • [07:03] How to insure different types of jewelry, whether it’s costume, gems and metals, or fine jewelry.

  • [12:31] What people can do to mitigate the damage if they get burgled or their home is destroyed by fire.

  • [16:22] What to do if your policy goes into non-renewal because you live in a high-risk zone for wildfires.

  • [19:51] How reinsurance companies impact the insurance industry.

  • [22:29] Ruth Stroup shares the reasons besides wildfire danger that a policy may be non-renewed.

  • [26:45] What Ruth can and can’t do as an agent when helping her clients navigate claims.

  • [33:11] Cathy asks Ruth Stroup to give a mini tutorial on liability and umbrella insurance.

  • [38:54] Ruth Stroup shares what she believes is the best kept secret in the insurance business.

  • [42:02] Cathy and Ruth talk earthquake coverage.

Links Relevant to this Episode

Ruth Stroup Insurance Agency’s website

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S4E5 Transcript: The Insurance Lady Answers Your Biggest Questions About Insurance

[00:02:50] Cathy Curtis: Ruth Stroup, thank you so much for being on my podcast, Financial Finesse. I can’t wait to talk to you about all things insurance.

[00:02:56] Ruth Stroup: I’m so glad to be here. Thanks for inviting me, Cathy.

[00:03:00] Cathy Curtis: So, Ruth, as you being an insurance person, and I know being a financial planner, that many times we prepare for one thing and then something different happens. And so we are gonna talk about things like that and what could go wrong.

[00:03:16] Cathy Curtis: And I’m gonna tell a short, personal story that we could start with. So I live up in the Oakland Hills, which is a beautiful woodsy neighborhood. Very quiet, peaceful. And, but the homes are separate from each other, lots of foliage around the homes, et cetera. And what we worry about most up here is fire.

[00:03:40] Cathy Curtis: And, but unfortunately, I was away on vacation recently and our home got burglarized. So of course we had to make a claim. And even though I am a financial advisor and I know a lot about insurance, when it happens to you, you realize that you don’t know everything. And one of those things is what is covered and what isn’t.

Ruth Stroup explains what’s covered and what isn’t covered by homeowner’s insurance if your home is burglarized.

[00:04:02] Cathy Curtis: So I thought maybe you could talk to that a little bit. I know you have a ton of experience in this area. And give our listeners an idea of what they can expect if this happened to them.

[00:04:14] Ruth Stroup: Great, Cathy, that’s such a great question. I find all the time that people think insurance, when we, when it comes to having a claim, we think insurance covers everything.

[00:04:24] Ruth Stroup: And when it comes to purchasing insurance, we’re trying to find all the ways to save money on our insurance. And those two things can be at odds. So when I work with clients, one of the things that’s the most important to me is to find out what matters to them. For example, if someone has a lot of jewelry or fine art or firearms for that matter, if they have things that they collect, they need special insurance for that.

[00:04:52] Ruth Stroup: And nobody really thinks about it because we don’t go out and buy the full collection at one time. We buy once, this birthdays, anniversaries, a special treat, a celebration of some sort. And so collections don’t come to us fully formed. They’re created over time, and we don’t think about how much they’re growing in value because we’re spending our cash flow on them.

[00:05:18] Ruth Stroup: Years ago, I had a client. This was back when I worked as an investment advisor over at Charles Schwab. He was in Castro Valley, he lived on a cul-de-sac. He was the survivor of three or four brothers, sisters, extended family members had passed away. And in his basement he had multiple sets of silver tea service, silver flatware, golf clubs, hobby things, tools. And somebody broke into his house, filled up the car.

[00:05:51] Ruth Stroup: He had parked in the garage with all the items that were in the basement. Drove away with them to sell them for 10 cents on the dollar, whatever else they were gonna do. He lived on a cul-de-sac. The neighbors saw his car come and go multiple times. But because it was his car, they never questioned it.

[00:06:12] Ruth Stroup: And I think, and he was talking about filing for the insurance claim. But in his case, in the world of what can go wrong around theft, which we’re seeing more and more of here in the east bay and in California, in general, all the items he had were sort of family inheritance. And it’s not like they got to be in the centerpiece of the dining room table.

[00:06:34] Ruth Stroup: They were in the basement. So if he had asked me as an insurance agent today, what I would think about insuring those items, I would ask him, did it have sentimental value? Which means I’ll be sad when it’s gone, but I won’t replace it. Or does it have financial value? Which means I’m gonna wanna replace this.

[00:06:56] Ruth Stroup: And when we have a fire, we have much more of a, of our things that we definitely want to replace.

How to insure different types of jewelry, whether it’s costume, gems and metals, or fine jewelry.

[00:07:03] Cathy Curtis: Yeah. Ruth, let me step back a minute. I wanna share my personal story on a collectible, a collection I had before we go into fire. So in my case, and a lot of women do this. I’ve been collecting jewelry for years and I’m not talking fine gold and gem jewelry.

[00:07:20] Cathy Curtis: I’m talking artisanal. Unique pieces that I find when I’m in Europe or on a weekend getaway in Sonoma or Napa or whatever. And I could tell you every piece I had, where I got it, and the story behind it. So I didn’t insure it because each piece was not a lot of value. And I didn’t worry as much about it as my fine jewelry.

[00:07:46] Cathy Curtis: Again, each piece was, every single piece of that collection was stolen. The thieves dumped out my jewelry chest and stole every single earring, bracelet, necklace that I had been collecting over the years. And that hurts. It really does. And I’m not gonna be able to replace it. It was probably worth about $15,000 in total.

[00:08:07] Cathy Curtis: And insurance doesn’t cover that. Cause I didn’t have any of it appraised. It, it wasn’t worth appraising any of it. So that’s a really good example of something you’re talking about. Now, if I had, if you were, if I had come to you and said, can I insure that? I really wanna insure that collection. Could that have been done?

[00:08:24] Ruth Stroup: It can. People don’t really, I, there’s a way I always ask the difference between is it costume jewelry, which is in the under $100. Is it fine jewelry? So $500 to $2,500. Or is it gems and metals? And I know people who insure none of it. I know people who insure all of it. There’s a way to insure them a little bit differently.

[00:08:49] Ruth Stroup: So a collective amount for smaller items and a, an itemized amount for larger amounts. But the jewelry company we work with. If it’s special enough to add it, it’s inexpensive to have, you can either have your most important pieces insured. Or if you collect stuff, you can insure it all. And then, and then you have to, the thing is to get replacement cost and insurance, you have to replace things.

[00:09:18] Ruth Stroup: And the items you have are more of a what’s the market value than what’s the replacement value. Because there are, they are all artisanal. But I see lots of ladies, I say, do you sparkle? And they do. Then I ask if they have special insurance for that. And most don’t, and then nobody knows what it costs.

[00:09:39] Ruth Stroup: So they don’t know what they’re saying. Yes or no to the men and their watches are exactly the same. Got a bonus, buy myself a $10,000 watch. My stocks vest, got myself a $10,000 watch. Had a baby, got myself a $10,000 watch. And over a decade, somebody might have 3, 4, 5 watches because they had occasions to, to mark with the watch.

[00:10:04] Ruth Stroup: Maybe one watch is not such a big deal, but $50,000, a hundred thousand dollars’ worth of watches. Many men have that much in their closet.

[00:10:11] Cathy Curtis: And it, and insurance does not cover watches. Is that correct?

[00:10:15] Ruth Stroup: It treats them as jewelry.

[00:10:17] Cathy Curtis: Yeah. Okay. What about silver sets of silverware? That’s not covered either, unless you have a rider.

[00:10:24] Ruth Stroup: Silver’s different because silver has limits on the policy.

[00:10:30] Ruth Stroup: But in the old days back when the flea market was the thieves market, what people went to buy back was their family silver. There was definitely a market for it. Today, grandma’s silver, every, every millennial’s, worst nightmare to have grandma’s silver delivered to them. To be the caretaker of dusted tarnished silver.

[00:10:58] Cathy Curtis: Oh man. Yeah, my aunt’s, my favorite relative in the whole world. I cannot believe that they took it because I know what you’re saying. You could find it in any consignment store, flea market.

[00:11:15] Ruth Stroup: And you can insure silver collectively without an appraisal.

[00:11:19] Ruth Stroup: It, it just the issue with the theft of silver, silver tableware, where it’s so much less. Your people either, they were either, they know, like when they get that personal on what they take. They’re looking for something or something bigger. That’s very malicious. And I’m so sorry that happened to you.

[00:11:39] Cathy Curtis: Yeah. I know it was strange to think some of the things that they took for.

[00:11:43] Ruth Stroup: Usually what they do is they go through all your drawers and all your closet and all the known, hiding places that people think that thieves don’t know about. And they look for cash, especially cultures that keep cash at home.

[00:11:59] Ruth Stroup: Yeah. They look for things that they can sell easily. So they like shoes and they like, they love handbags. They also like handbags because the handbags can hold stuff as they’re taking things away. Uh, I got broken in two years ago. They used my luggage to steal my stuff. Yeah.

[00:12:18] Cathy Curtis: Yeah, they, I got several bags stolen that were obviously used to carry, cart things.

[00:12:24] Cathy Curtis: But they knew to take my nicest bags though.

[00:12:27] Ruth Stroup: Yeah. These were designer shoppers. Oh my gosh.

What people can do to mitigate the damage if they get burgled or their home is destroyed by fire.

[00:12:31] Cathy Curtis: Oh, given that, let’s, what is some good? You can’t prevent everything, but what, what are a few things people can do to try and mitigate the damage if they do get burgled?

[00:12:44] Ruth Stroup: So in any kind of claim you wanna do almost like a fire drill for your claim.

[00:12:52] Ruth Stroup: And the first question is, would I replace that? So believe it or not, most people have more money in clothes than anything else and most of us could pair our closets down by half. The first thing to say is if the insurance company did not pay me for this, would my life be the same? Like I might be sad.

[00:13:16] Ruth Stroup: but would my, would I change? Would it, would I be able to pay my housing or rent? Would I be able to pay my taxes? Or would I be able to eat the same way I ate? Will I have enough cash reserve for the long term? And I get very existential about things because if your quality of life wouldn’t change, if you don’t have the item and if you would not replace.

[00:13:42] Ruth Stroup: It’s terrible that someone took it, but it doesn’t have any financial value. It only has very high sentimental value, like your silver set from your aunt. And so I tell people that I really focus my insurance dollars on things that I want to replace. Okay, because then it has real financial value.

[00:14:06] Ruth Stroup: So for example, most people’s wedding rings, they would really want to replace. But an inherited wedding ring, hard to know. A wedding ring that has value after a divorce, hard to know.

[00:14:18] Cathy Curtis: Let’s take example, eBikes, which mine was going by the way. So Rob and I love eBikes. And it does enhance the quality of our life in a big way.

[00:14:32] Cathy Curtis: We take road trips with them, et cetera. So those were stolen. We definitely wanna replace those. So that’s a good example. Whereas my leather coat collection, am I gonna miss it? Yes, but am I, do I have to have all those? No, it’s a really good distinction because a lot of the stuff is just material stuff that you’ve collected that is not gonna change your life in any way.

[00:14:58] Cathy Curtis: So I, I think that’s a really excellent way to think about what to insure and to use your dollars wisely when you’re buying insurance. Yeah.

[00:15:06] Ruth Stroup: And I segue then, Cathy, too, people who are having a hard time getting insurance because they live in a location that’s now difficult to insure due to the wildfires we’ve seen over the last five years, since 2017. And with those policies, what should I, my first question to the people is would you rebuild?

[00:15:26] Ruth Stroup: I’ve worked with lots of seniors who are 70+ years old. They don’t wanna build another house. I talked to other people, they’re like, we love where we live. We would absolutely wanna rebuild. And so we set up the insurance based on what they expect the outcome to be. So sometimes I ask people what’s your next house and how soon in the future is it?

[00:15:51] Ruth Stroup: And for somebody who lives, let’s say in a house with a couple of stories worth of stairs and their next house is something with no stairs, potentially in an area with much less fire risk or closer to family or closer to medical, then a fire might only accelerate that move. What you want in a fire insurance policy is replacement cost, but that means you replaced your home.

[00:16:20] Ruth Stroup: You’re not required to rebuild it.

What to do if your insurance policy goes into non-renewal because you live in a high-risk zone for wildfires.

[00:16:22] Cathy Curtis: Okay. Now the insurance world in California has changed a lot because of the fires. So what in, especially in areas like Napa or here in Oakland and other areas, and some people’s insurance policies have been canceled due to that. What do you, what do you do in that case?

[00:16:45] Ruth Stroup: In the insurance business, we call it non-renewal. Canceled is like when I don’t make a payment and then they cancel me midterm.

[00:16:53] Cathy Curtis: Okay. Thank you for correcting me. Non-renewal.

[00:16:55] Ruth Stroup: Super important distinction because of the timeframe. If the insurance company is going, the insurance cycle if a policy is issued.

[00:17:04] Ruth Stroup: The insurance company does an inspection in the first 60 days. And if they find deficits in the property condition, they give you 30 days to remediate that. And at the end of that 30 days, if you don’t show proof of the updates, then the policy will cancel at any time until the next renewal. The only reason the insurance company could cancel coverage is if there is a, is if there’s non-payment. So assuming the payments have been made, then when it comes up to renewal, that’s the only time the insurance company can evaluate the risk and decide if it fits their current profile or not.

[00:17:47] Ruth Stroup: And this will change year by year, carrier by carrier. And it’s con, it creates a lot of confusion and a lot of bad feelings.

[00:18:04] Cathy Curtis: But I brought this up because that is definitely a distinction. So policies cannot be canceled just one day. They say, sorry, we can’t insure you anymore.

[00:18:19] Ruth Stroup: Nope. Insurance companies have to wait till the renewal date, and they must give you 90 days to shop for your new coverage. So if they miss the win, so if this is not taken lightly, insurance companies are, they wanna grow just like any other business. And they have lots of masters. They have to have a certain amount of reserve to be able to issue a new policy.

[00:18:42] Ruth Stroup: And the regulators really watch the insurance company’s capacity to pay claims. And some of the way we get that capacity is we buy insurance on our book of business in the industry. We call this reinsurance, right, that’s a big business. The reinsurance companies for years, they would collect money every year.

[00:19:05] Ruth Stroup: And then once in about 20 years, something really terrible would happen and they’d have a big payout. They’ve had record payouts in four of the last five years, they have changed their criteria. And if an insurance company needs the reinsurance in order to have capacity to pay, we don’t just have to pay by the regulator’s rules.

[00:19:27] Ruth Stroup: Now we don’t have to just pay by trying to run a good business rules, our own internal things. We also have to pay by the rules of the reinsurance. And it’s that number of constituencies that get involved in things that make insurance complex and that make insurance companies sometimes have to change their guidelines more quickly than you might expect.

How reinsurance companies impact the insurance industry.

[00:19:51] Cathy Curtis: So the reinsurance companies are really dictating a lot of what’s going on.

[00:19:56] Ruth Stroup: They have a pretty big impact. But you have to understand that it’s not just, they don’t just pull a lever and say, hey, insurance company, make a change. It’s, we go to them to get capacity. We have to have capacity to pay in order to maintain a certain book of clients.

[00:20:15] Ruth Stroup: The regulators look at the reinsurance companies for years, it was a very profitable business on the idea that you’d pay out big every once in a while. But every once in a while has become every year. And so they’re looking for their, the comp, their clients, the insurance companies to qualify for reinsurance.

[00:20:34] Ruth Stroup: We have to do, we have to do things a little bit differently in terms of our, the big data. And what’s in our book of businesses and we have to pay more for it too.

[00:20:44] Cathy Curtis: Okay. So let’s, let me just give an example. Let’s say in your book of business, whoever does this, I identify five homes in your book of business that are fire, big fire risk.

[00:20:56] Cathy Curtis: And so you notify at the renewal date, you notify the homeowner. These are the things they need to do to mitigate fire danger?

[00:21:09] Ruth Stroup: No, sometimes it’s this location no longer qualifies, hard and fast.

[00:21:13] Cathy Curtis: Ah, okay.

[00:21:14] Ruth Stroup: So in, and it could be a client that just signed up last year. It could be a client who’s been with you for 40 years.

[00:21:21] Ruth Stroup: We don’t get to pick his agents.

[00:21:22] Cathy Curtis: Okay. So then that homeowner by law has 90 days to shop for new coverage.

[00:21:32] Ruth Stroup: Correct. And the marketplace is everchanging and every insurance company has their own data modeling for risk. So you might be with an insurance company that can’t shop for other policies for you.

[00:21:48] Ruth Stroup: So you need to find both a new agent or broker. And a new carrier. And then as well as a new policy, other people you might be with the agent or broker may be able to place you somewhere else within their suite of carriers that they offer. So the shopping experience is different for everybody.

[00:22:07] Cathy Curtis: I’ve had clients experience both of those ways that you’re describing. Okay, so that, and then what is the average rate increase in that case? Is it quite large?

[00:22:19] Ruth Stroup: It, when people are non-renewed due to wildfire risk, the new policy can cost between two, two times to five times more than the current policy.

Ruth Stroup shares the reasons besides wildfire danger that an insurance policy may be non-renewed.

[00:22:29] Cathy Curtis: Okay. Okay. Are there any other reasons besides fire danger that a policy would not be.

[00:22:37] Ruth Stroup: Absolutely. Okay. And unfortunately, and claims is a major reason that insurance companies will non-renew clients. So yeah, some clients like whenever somebody has a potential claim, I’m like, let’s look at this and make sure it’s worth it to file this claim.

[00:22:59] Ruth Stroup: And worth it means things like how much will impact my. And will it impact whether or not I can get insurance with you? And if I’m going to sell my house in the next five years, will it impact the new buyer’s ability to get insurance?

[00:23:16] Cathy Curtis: Oh, that’s really critical. So let’s dig into these a little bit. So do you know, you can tell how much more it will cost on the next renewal date. If they make a claim of so much dollars?

[00:23:32] Ruth Stroup: I have an idea. So every carrier has its formula for rate surcharges. And I get Farmers. We have a surcharge for a claim as well as we have a discount, if your claim’s free. So I tell, my formula for whether or not to consider filing a claim is your current deductible plus your current premium. And if it’s less than that, you shouldn’t file a claim.

[00:24:02] Cathy Curtis: Okay. All right. But that doesn’t sound like it could be, like let’s say your deductible’s $2,500 and your current premium’s $3,000.

[00:24:12] Ruth Stroup: You wouldn’t even consider reporting it until it’s $5,500 or higher there.

[00:24:19] Cathy Curtis: Okay. All right.

[00:24:20] Ruth Stroup: Now, a lot of people, the number one, you know, we’ve talked about theft. We’ve talked a little bit about fire. But the real, most common claim we see in the home insurance industry is water damage. And water damage is one of those things, like what was the source of the water?

[00:24:38] Ruth Stroup: How long was the water damage? How long, was it a slow leak or a burst pipe? There are so many variables in water damage that I invite all my clients to call me if there’s anything going on with water in their house. Because just like that example where I said, even a former owner can impact the insurability of the house.

[00:24:58] Ruth Stroup: It’s those water damage claims. And what happens is someone calls to say, oh, we need to get the house ready for the market. So let’s send it to Oz and get, give it a good fluff and, and a contractor. Will we need to replace his pipes or here’s this old leak? And they tell the owner, who’s usually a retired person downsizing.

[00:25:20] Ruth Stroup: Oh, let’s see if your insurance company will pay for some of this. But oh, it’s wear and tear, old routine maintenance. So the homeowner calls the insurance company. And the insurance company declines the claim, but it’s water. So it’s given a red flag to the next insurance company that there’s a water, a potential water loss at this property because somebody called in and had a concern about water damage.

[00:25:47] Ruth Stroup: And since water damage is the number one cause of loss, some insurance companies won’t even touch a $0 claim.

[00:25:56] Cathy Curtis: Whoa. So I’ve often I know this, that you have to be really thoughtful and careful about when and why you call your insurance company. This is a perfect example.

[00:26:06] Ruth Stroup: And you also have to understand who you’re speaking to at the insurance company.

[00:26:12] Ruth Stroup: So I’m an agent. If somebody calls me and says, hypothetically, how will the policy respond? We can run through all the hypotheticals, but if you have insurance with a company where you call directly into an 800 number all in, they say, let’s have you talk to claims. Every claims call is recorded.

[00:26:32] Cathy Curtis: Okay. So am I right on this, that you as an agent and not just you, even though I know you’re great are an advocate for the client.

What Ruth can and can’t do as an insurance agent when helping her clients navigate claims.

[00:26:45] Ruth Stroup: I’m a navigator. So I can’t tell claims to pay or not to pay. I can’t tell them how much to pay. I can’t do any of that, but. And every carrier has its rules. In my carrier, Farmers, I’m allowed to review hypotheticals with anybody, any time. Will it make, how will the insurance company respond to this set of circumstances?

[00:27:09] Ruth Stroup: And I cannot tell them not to file. Like I sometimes I’m like, I personally think that the insurance company is likely to decline this claim. But the only way you’ll know if it will be declined is if you, it’s up to you. People are regularly asking me in the name of optimizing their insurance. What’s that little magic dollar limit where yes, I absolutely should file a claim.

[00:27:34] Ruth Stroup: What I find is many people think that they won’t file a claim until it’s say, over $50,000. And it might be in their best interest to file a claim for $20,000. And so in this market where insurance rates have become so high, the folks sometimes just give me the highest deductible. But the price difference between the highest deductible and something that’s a little more user friendly may not be very much. So in the sales process, when reviewing the coverage and getting ready to purchase or to renew, I use this formula I call bank the difference.

[00:28:08] Ruth Stroup: And so if there’s a difference in deductible, let’s say between I’m gonna use numbers so I can do the easy math. Between $5,000 and $10,000, right? That’s a $5,000 difference. Now let’s say I save $500 for taking additional $5,000 of risk. It would take me 10 years, $5,000 divided by 500, to bank the difference if I took the savings.

[00:28:39] Ruth Stroup: In the difference of the cost of the insurance policy and put it in the bank every year. It doesn’t in my world. My, I tell people in home insurance, the average claim is about once a decade. So if you can bank the difference in five to, and under five years, absolutely take the higher deductible.

[00:29:00] Ruth Stroup: Five to seven years, maybe seven years or more, consider the lower deductible. Ten years, absolutely. The lower deductible is giving better value. And in car I have a little shorter timeframe, three years for absolutely take the higher, three years where you absolutely take the savings. In about five years where you probably are be, get better value with the lower deductible.

[00:29:28] Cathy Curtis: I love it. That you have all these formulas you use. I’m sure you’ve developed those over the years of being.

[00:29:35] Ruth Stroup: I’m terrible at math. It’s what I call chunky math. It helps me. Describe a concept without getting too technical.

[00:29:44] Cathy Curtis: Yeah. Ruth let’s, I wanna just segue just a tiny bit and just ask you, you’ve been doing this for a long time.

[00:29:50] Cathy Curtis: Just talk a little bit about yourself for a minute.

[00:29:53] Ruth Stroup: Sure. I am 16 years in the business now. My agency is with Farmer’s Insurance. We do Farmer’s Insurance, and then we broker things that Farmer’s doesn’t offer. So that’s one of the reasons why we’ve become such experts in the high fire risk. Because farmers doesn’t offer that.

[00:30:12] Ruth Stroup: So I’m not in a compete situation. This is my third career. I was a cook for a decade. I worked for Charles Schwab for a decade. And now I’ve been doing insurance for longer than anything else. I love it because the insurance is pretty much the same day in and day out. You could think it was boring, but the people are all special and unique and different.

[00:30:36] Ruth Stroup: And I just love all the different people I get to meet when I was at Schwab. We slowly but surely, we’re only serving the more and more affluent. It’s a great American dream to own a home and more people participate in that than might use services like yours, Cathy, like a financial advisor. Because it’s just a more ordinary thing people do.

[00:30:57] Ruth Stroup: So I serve a much broader clientele than I had exposure to at Schwab. Which means that I get to work with a much more diverse clientele and I get to be Oakland-based and really serve this community. We serve the entire state of California, but the lion’s share of our clients are here in Oakland.

[00:31:16] Cathy Curtis: Okay. Well, I wanna make one comment about the insurance thing as far as I’m concerned as a financial advisor. I am an investment advisor, but I’m also a financial planner, and insurance is absolutely the bedrock of any good financial plan. And yes. People, I think people make a mistake thinking it’s boring. When I talk to you about it, it certainly doesn’t seem boring.

[00:31:37] Cathy Curtis: And it is so important to know all the different layers of your insurance policy. And I think people, when they’re talking to their agent, like you, they’re getting the information they need and their questions answered. But then they get the policy, they file it away. They never read it. And they’re not really aware of their coverages until they have to make a claim.

[00:31:57] Cathy Curtis: And maybe not, all of them have good insurance. You called it navigator. So I’ll call it navigator. I like to think of it as an advocate too, but they may not have that.

[00:32:08] Ruth Stroup: So most people, their first insurance, they buy on the internet or an 800 number where they don’t have anybody that advises them.

[00:32:17] Ruth Stroup: And then from watching your own clients that most people, especially if they’re planning and they have goals, their life expands and they have more money and more at stake. And sometimes they also have more in terms of debt because they use debt in order to build their assets, especially if they’re investing in real estate.

[00:32:37] Ruth Stroup: So. We, I regularly see people who have just the bare minimum limits for liability on their car insurance, because they bought it when they had nothing, and they just renew it. And nobody says, hey, what is your job today? What do you earn today? Do you have savings and money in the bank? Do you own real estate?

[00:33:00] Ruth Stroup: And so people will have just the bare minimum limits and not think twice about it because it’s a bill they pay. It’s not a policy they count on.

Cathy asks Ruth Stroup to give a mini tutorial on liability and umbrella insurance.

[00:33:11] Cathy Curtis: Let’s talk liability now that you’ve brought it up. In particular, buying an umbrella policy. Can you do like a mini tutorial on that? Because I have to explain umbrella quite often.

[00:33:22] Ruth Stroup: Sure. So with umbrella we see that the most common misunderstanding about umbrella is that people think it covers gaps in their coverage for their own personal property. And that’s the one thing it doesn’t cover is your personal property. What umbrella does is it provides money for a legal settlement.

[00:33:46] Ruth Stroup: And the attorney that comes with it in the event that you’re sued usually for an injury to a third party, the most common use of the umbrella policy is a car accident. For a business, the most common use for any kind of liability coverage is just a simple slip. And there are, what people don’t realize is that they can host a social gathering in their home or in a restaurant or a rented facility, like a country club or a social hall and their guests.

[00:34:24] Ruth Stroup: Any one guest could have a terrible accident on the way home. And if they had alcohol at your event, you can be added to the number of people who are named in a lawsuit for the person who was injured. That’s big. So the four categories I look at for where your money is to see, do you need more protection for your money?

[00:34:48] Ruth Stroup: So the umbrella insurance impacts, it protects your assets. So the first is anything not in a retirement account. So if you’ve got somebody at a company that’s getting company stock, if you’ve got somebody that’s always saved and has a couple of CDs that, no matter what it is, the non-retirement. Stocks bonds, mutual funds, CDs, bank accounts.

[00:35:12] Ruth Stroup: That’s the first layer of things we wanna make sure we protect.

[00:35:15] Cathy Curtis: That’s all the non-retirement things that I call them. Taxable accounts. They beat people’s brokerage accounts, things like that. Okay.

[00:35:24] Ruth Stroup: And then the next thing that people have no idea about is that their wages could be garnished.

[00:35:29] Ruth Stroup: So you can be fresh outta school, have a big student loan, have a big career in front of you. And maybe you’re making $150,000 a year, but you’re still driving on minimum car limits, like $15,000 per person injured. And if you had an accident that you couldn’t pay for, they could garnish your wages even for as much as a decade.

[00:35:53] Ruth Stroup: And that would change your quality of life forever. So even people who don’t have stuff, if they have wages, they need better coverage. And I really like the umbrella policy for them.

[00:36:04] Cathy Curtis: Okay. Let me clarify something. Are IRAs at risk to judgment, to creditors in California?

[00:36:11] Ruth Stroup: They are not technically, nothing in the retirement suite is technically at risk of creditors.

[00:36:18] Ruth Stroup: How I always look at the OJ Simpson case, civil case. OJ’s money was primarily in the NFL pension, every pension payment could be garnished. Every, like it’s not technically at risk. But if that’s where your money is and you have to pay a settlement, you may end up taking the money out plus taxes, potentially plus a penalty in order to do that.

[00:36:48] Ruth Stroup: So I always round up. And if a person has significant retirement assets, I wanna at least think about them. And then I feel the same way about home.

[00:36:59] Cathy Curtis: It’s up to the judge in some cases, right?

[00:37:01] Ruth Stroup: If they, or they might say the judgment is half a million dollars and you have a hundred thousand in coverage.

[00:37:08] Ruth Stroup: So now you have to figure out where to get the other 400, and you make an arrangement with the, I will liquidate assets and pay a hundred thousand. I will accept wage garnishment for this period of time. I will this or that. And the insurance company wants so much to settle within your policy limits, but you have to give them some tools to be able to do that.

[00:37:33] Cathy Curtis: Is this a really common claim? What percent?

[00:37:37] Ruth Stroup: It’s not a, so this is one of those funny insurance things where it’s, you don’t wanna play the odds. You don’t wanna gamble with it. If you have the assets at risk, you want to have coverage. Because here’s what happens. An attorney in the bay area costs about $500 an hour.

[00:37:57] Ruth Stroup: A $1 million liability policy with the attorney coverage that comes with it costs, depending on what you have to cover, plus or minus $500. So it’s like having an attorney on retainer, right? It’s some of the best, and it’s inexpensive because it’s rarely used. But do you wanna be the poor soul who needs it and doesn’t have it?

[00:38:22] Cathy Curtis: I sure don’t. Now let me ask you this. There are some technical things like you have to have so much in your liability limits on your auto and home before you can add umbrella. Is that correct?

[00:38:35] Ruth Stroup: That’s correct. So one of the reasons umbrella is expensive is because the small things are handled by the underlying policy. The cars, the motorcycles, the boats, the houses, the income, the rental property, the vacation house. All of it needs to have a certain level of coverage.

Ruth Stroup shares what she believes is the best kept secret in the insurance business.

[00:38:54] Ruth Stroup: And it’s normal to, to like to have those coverages. It’s not high coverage. And then for my high earners, I like to add an, I have the opportunity to add an additional $1 million, uninsured/underinsured motorist coverage to their policy. And this is the best kept secret in the insurance business.

[00:39:22] Ruth Stroup: Most of my clients who are going to be in a terrible accident. It’s not going to be their fault. They’re not going to be the one paying. They’re gonna be the party that’s injured. And the person who injures them is likely to have terrible insurance because they’re expensive to insure. They’re a new driver, bad driving record, possibly a DUI record, maybe even uninsured, maybe stolen car they didn’t have a right to drive.

[00:39:53] Ruth Stroup: And your policy can, the uninsured motorist pays when your loss is above the amount of coverage available in that other party’s policy. So if that other policy is only paying $15,000 per person, or maybe the boiler plate policy is paying a hundred thousand per person, but your combination of medical loss wages and lingering effects is more than a million dollars.

[00:40:27] Ruth Stroup: It makes a big difference to have uninsured motorist on your umbrella policy. And it’s very inexpensive and it’s a really good protection for people who have a high income, because it’s that wages piece.

[00:40:43] Cathy Curtis: Yeah. That’s so important. Now, why is this such a secret?

[00:40:44] Ruth Stroup: Because it’s inexpensive. I regularly see policies where the insurance companies sold the client, less uninsured motorists from the regular liability.

[00:40:56] Ruth Stroup: Maybe a lease required 100, 300 limits of liability, the person was trying to control costs or cut a corner. The agent sold them $30,000, $60,000 and the insurance company only has to pay out if your coverage is greater than that, of the party that injured you. So it’s a very inexpensive coverage.

[00:41:19] Ruth Stroup: It’s misunderstood if you’re in a car accident and you’re a pedestrian. A bicyclist. A passenger of any vehicle or a driver of any vehicle. And it’s another driver’s fault. You can use this coverage if their insurance is inadequate for what your needs are.

[00:41:38] Cathy Curtis: Do all carriers offer this option? Do you know?

[00:41:41] Ruth Stroup: It’s required by law to, it’s required by law to offer it. And we have to make, you have you sign a disclosure if you take less than what we give, the way people DocuSign these days that do it blind. They don’t even know they’re being offered less.

[00:41:55] Cathy Curtis: No, it’s true. Thank you. That is an awesome tip, Ruth. Thank you so much for that one.

Cathy and Ruth talk earthquake insurance.

[00:42:02] Cathy Curtis: Let’s talk earthquake insurance. Now, most of the people I think that listen to this podcast are in California. They may not, but everyone knows the risk of earthquake in California. So what could go wrong there?

[00:42:15] Ruth Stroup: Most people don’t buy earthquake insurance. And they don’t realize what their responsibilities might be to their lender.

[00:42:25] Ruth Stroup: And in order to, if their house has severe damage from earthquake coverage, most people also don’t realize that they can shop around for earthquake coverage. That there’s more carriers than the earthquake authority. And lastly, most people think the earthquake authority is part of the California state government and receive funding from the state.

[00:42:46] Ruth Stroup: And they do not. They receive funding from policy holders and insurance companies. And then lastly, many people have the belief that FEMA or some other federal organization will help them after an earthquake loss. And they do not realize how limited those funds are and that they shouldn’t be relying on them.

[00:43:09] Cathy Curtis: Okay. So, what do you advise your clients to do in California?

[00:43:15] Ruth Stroup: There are several profiles of clients who I feel really need to buy earthquake insurance. What we learned during the mortgage crisis back in 2008 to 2010 is many people walked away from a mortgage, took a break and restarted their lives.

[00:43:34] Ruth Stroup: And they did not. If anything, they, they didn’t experience a big financial loss. They may have hurt their credit for a while, but it wasn’t impossible in our agency. The people we see who really care about having an earthquake policy are people who have over a quarter million dollars in home equity. For a lot of people, that’s a down payment the bank would not let them walk away from.

[00:44:06] Ruth Stroup: Their loan, even if the house was severely damaged and uninhabitable, that’s. People, if your income is so high there, you’re not gonna be able to do, to just walk away the way people walked away in the mortgage crisis. Because the people who walked away in the mortgage crisis didn’t have that much skin in the game.

[00:44:24] Ruth Stroup: They like, they may not have had the high paying jobs.

[00:44:29] Cathy Curtis: Well, yeah, they may not have had income. You didn’t have to document income on a lot of those loans that were done in those days.

[00:44:36] Ruth Stroup: But today’s buyers go in and buy a house over a million dollars very often and with 20% down or more. So they start with quite a bit of skin in the game.

[00:44:47] Ruth Stroup: Many of those people to afford their mortgage have a very high income. Too high to be able to justify a quick claim on a property that still owes hundreds of thousands of dollars. The third is a category that has more to do with you and me, Cathy. There are some professions where you could pick up and move and go live somewhere else.

[00:45:11] Ruth Stroup: But if you don’t have good credit, you can’t get a job. So we both work in financial services, and if I hurt my credit rating, because a bankruptcy or a quick claim on a house after an earthquake, I might not be able to be employed. Some people in the federal government have the same issue. So people who need to keep clean and good whose employment requires good credit.

[00:45:37] Ruth Stroup: They absolutely wanna make sure with an earthquake policy that they won’t lose their credit because they had to walk away from a house that was badly damaged in an earthquake. And so those are the three money reasons. And then there’s site specific issues. There’s some houses that the type of construction they are, they’re top.

[00:45:58] Ruth Stroup: And the more top-heavy your house is, the more you need really good retrofitting so your house doesn’t come separate from your foundation. And the more potential you have for damage. So the earthquake carriers set the rates based on the site specific risk, proximity to fault lines, and then the, the configuration of the house and the age of the home.

[00:46:23] Ruth Stroup: If the policy is expensive, the bad news is you probably need it because you’re a higher risk client. Or your property, your location is higher risk. And I have clients who do one of the three following things, they retrofit and skip the insurance. They feel like they’ve done enough site improvement to feel safe and secure.

[00:46:47] Ruth Stroup: And that’s what they, how they wanna spend their money by mitigating risk. Some people buy the insurance and don’t do the retrofit because they have insurance. Some people do both. The majority of people by and large don’t buy earthquake insurance. And the challenge we’re gonna have in the bay area is if we have a serious earthquake, we will have very local, highly localized changes to our economy.

[00:47:16] Ruth Stroup: The bay is one of the largest economies, not just in the country, but in the world. Being prepared for an earthquake is really important.

[00:47:25] Cathy Curtis: Yes. One of the arguments I hear about buying earthquake or not is, oh, the deductible’s so high. It just doesn’t make sense to buy it. What is your response to that?

[00:47:33] Ruth Stroup: I always, whenever anybody says something’s expensive, I always say compared to what? Right?

[00:47:37] Ruth Stroup: And then you could even plan for a high deductible, and people will take money from places they might not ordinarily take money from if they need to pay its deductible. So for example, you won’t be able to get a home equity line. If your home is badly damaged from an earthquake, but you would be able to borrow from cash value, life insurance, maybe take an unexpected 401k loan. Maybe take an actual withdrawal from your, from an IRA account.

[00:48:10] Cathy Curtis: Or a margin loan on your investment portfolio.

[00:48:12] Ruth Stroup: A margin loan on the investments. People will have money from places they didn’t expect. You might get a family loan.

[00:48:18] Ruth Stroup: So the question I have for people who have, let’s say a hundred thousand dollars deductible, is what they still will have up to $700,000 of insurance. After they exceed the deductible, what’s their plan to access a hundred thousand dollars? And the people have money in their house.

[00:48:40] Ruth Stroup: Have good incomes who need to keep good credit. Those people have more access to money than they might realize if they sat down and thought about it. And people like you, Cathy, will be super important to those folks when it’s okay. If I had to come up, if you’re like, what could go wrong? Let’s find out like, where do we have a hundred thousand dollars squirreled away for an emergency?

[00:49:05] Ruth Stroup: Is it a margin loan? Is it a loan against cash value life insurance? Is it a family member? Let’s just assume it’s a not a traditional source.

[00:49:14] Cathy Curtis: Yes. So I, what you’re saying about earthquake, and I agree with you a hundred percent is again, like a lot of things. You look at each person’s situation, financial details, and you determine whether financially it makes sense.

[00:49:30] Cathy Curtis: The risk/reward to buy earthquake or not, basically.

[00:49:34] Ruth Stroup: Well insurance doesn’t have a risk reward, Cathy. It never gets you a reward. It only gets you back to where you were at the time of loss. So we don’t think about it this way. I think about it very simply in terms of what would your life look like if this asset wasn’t contributing to your long-term financial goals?

[00:49:54] Ruth Stroup: And if you’re comfortable not having that, then insurance is less of an issue for you than the next person.

[00:50:03] Cathy Curtis: Yeah. When you’re putting it that way, in the case of a total loss of a house in an earthquake, it’s pretty clear the decision you should make.

[00:50:13] Ruth Stroup: And what people wanna do is they wanna negotiate with the possibility of the risk or the potential loss.

[00:50:22] Ruth Stroup: I have a friend who lives up in Napa and he said his neighbor just bought earthquake insurance the month before the earthquake. Didn’t that guy get lucky. He only had to pay for a month of insurance before you actually got a payout.

[00:50:39] Ruth Stroup: The day people buy the earthquake insurance or any insurance is the day when the thought of loss of the entire asset is a, puts a bigger pit in their stomach than the guaranteed loss of writing a check to the insurance company and maybe never getting that money back.

[00:50:51] Cathy Curtis: Okay. Gosh, Ruth, great info on earthquake. What other, is there anything else that you’d like to add to this podcast thus far?

[00:51:01] Cathy Curtis: Important things that could go wrong? Any gems that you like? You’ve already shared with us a few real gems on insurance. I’ll give you the floor.

[00:51:12] Ruth Stroup: Sure. My, the thing I know the most about insurance is that you have to have a policy in force to be able to make a claim. That’s car insurance, home insurance, life insurance, business insurance.

[00:51:26] Ruth Stroup: So you want to test drive that insurance. And say, how will this benefit me at the time of loss? You’d never base this on return on investment. I think about it a little bit like the way I think about when I go to a casino. Will the money I put in that I spend in this casino provide me enough fun that I won’t be sad that I don’t have that money at the end of the night?

[00:51:55] Ruth Stroup: And so the money I spend on insurance needs to me, give me the confidence that if something happens, I have financial support to solve problems. And so I would say most people underinsure. Most people see insurance at, we hear all the time. People think insurance is just a racket. And I’ve lived a life where I’ve seen large claims fade out and where insurance made a meaningful difference to somebody.

[00:52:26] Ruth Stroup: And that’s been, insurance does its best work when it’s able to make a meaningful difference in your life or the life of your family.

[00:52:39] Cathy Curtis: Okay, Ruth. That’s great. And like I said earlier in the podcast. I really believe that having the right insurance is the bedrock of any good financial plan. And Ruth, you’ve offered an amazing amount of great information.

[00:52:55] Cathy Curtis: Can you share with the listeners where you can be reached and whether you write a blog or any information about you that we could share? And I’ll put it in the show notes.

[00:53:06] Ruth Stroup: Fantastic. So I serve the state of California. Most people reach me with a simple phone call at 510-874-5700. If you Google Ruth and the word Oakland, you will find me.

[00:53:25] Ruth Stroup: I am not hard to find. And on purpose, we are working on a soon-to-be-released newsletter that will be called Tuesday Tidbits. It will be 100 to 250 words of a sort of insurance focused life hack, really focusing on people who are looking to, who are in a growth mindset and wanna make sure that they have the matching protection to their assets as they grow.

[00:53:52] Ruth Stroup: It will answer those simple questions. Do I have to take the insurance with the rental car or is it a waste of money? And then it will also talk about things like creating legacy with life insurance, thinking about, you know, how philanthropic you want to be. What does your, I’m 60 years old. So I think about, I think a lot more about legacy and meaning. But I still think a ton about growth.

[00:54:12] Ruth Stroup: So we’ll have that. And I have a team here that works with me. I spend the majority of my day training my team. And so if you can’t reach me for any reason, I have great people who work with me, and any one of them would be happy to help.

[00:54:29] Cathy Curtis: Okay, Ruth. Thank you again for taking the time to talk with me on my podcast.

[00:54:34] Cathy Curtis: It’s been an invaluable discussion.

[00:54:37] Ruth Stroup: Thanks, Cathy. It was really fun.

[00:54:38] Cathy Curtis: It was fun. I’d love to do it again.

[00:54:42] Ruth Stroup: Okay. Thank you so much. We’ll talk to you.

[00:54:43] Cathy Curtis: All right. Okay. Bye bye.

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How Will Student Loan Forgiveness Affect You?

Student Loan Forgiveness

After months of discussion and debate, President Biden announced on August 24, 2022 that many federal student loan borrowers will be eligible for some type of debt forgiveness. Those who didn’t receive a Pell Grant may be eligible for up to $10,000 in forgiveness. Meanwhile, Pell Grant recipients may see as much as $20,000 of debt forgiven.

President Biden’s student loan forgiveness plan comes as welcome news to many Americans drowning in debt. Yet many—voters and politicians alike—oppose the program.

In fact, many Republican leaders are threatening legal challenges in an effort to block the bill. If this happens, the plan’s future may be in jeopardy.

Nevertheless, borrowers who are eligible for student loan forgiveness should be prepared to take advantage of the program if and when it begins. Here’s what you need to know about Biden’s student loan forgiveness program, including how it works and how it may benefit you.

What’s Included in Biden’s Student Loan Debt Relief Plan?

The Student Loan Debt Relieve plan forgives $10,000 of student loan debt for federal student loan borrowers. In addition, borrows who received a Pell Grant may be eligible for up to $20,000 in student loan forgiveness.

The plan also includes:

  • An additional (and possibly final) extension on federal student loan payments until December 31, 2022
  • A push for borrowers who may be eligible for the Public Service Loan Forgiveness Waiver (PSLF) to apply for the waiver before it expires on October 31, 2022
  • The creation of a new income-driven repayment plan (IDR) that would lower monthly payments and potentially reduce the time period required for loan forgiveness for eligible borrowers.

Who’s Eligible for Student Loan Forgiveness?

To be eligible for forgiveness, borrowers’ income levels must be under $125,000 for single borrowers and $250,000 for married couples and head of household filers. Borrowers may use their 2020 and 2021 tax returns to determine their income. They only need to meet the income requirements in one of these tax years.

In addition, only Federal loans funded by June 30, 2002 are eligible for forgiveness. This includes consolidated debt.

Federal loans for graduate school are also eligible for forgiveness, as are Parent Plus Loans. However, if a parent has more than one Parent Plus Loan for multiple children, they’re only eligible for total forgiveness up to $10,000.

Current students are also eligible for student loan forgiveness if they have debt. But if the student is a dependent of their parents, the parents’ income will determine eligibility for forgiveness.

Lastly, it’s important to emphasize that student loan forgiveness only applies to federal loans. Borrowers who refinanced their student loans with a private lender cannot take advantage of the program.

What Do Borrowers Need to Do?

Some parts of the student loan forgiveness plan will go into effect automatically. For example, many borrowers with IDR plans who have already recertified their income with the US Education Department will be eligible for loan forgiveness automatically.

Meanwhile, other aspects of the plan may require borrowers to take more action. One example applies to borrowers who made payments on their student loans since the start of the Covid-19 pandemic.

Since the government paused federal student loan payments in March 2020, borrowers can request a refund of any payments they made after that date. This makes most sense if a borrower’s loan balance is less than $10,000, and a refund would allow those payments to be forgiven instead.

Is Student Loan Forgiveness Taxable?

Thanks to the American Rescue Plan Act of 2021, most student debt discharged through 2025 will be tax-free—at least at the federal level. At the state level, income tax consequences will vary by state.

Currently, 13 states may treat forgiven student loan debt as taxable income. These states include Arkansas, Hawaii, Idaho, Kentucky, Massachusetts, Minnesota, Mississippi, New York, Pennsylvania, South Carolina, Virginia, West Virginia, and Wisconsin.

The Tax Foundation estimates that borrowers could incur anywhere from $300 to over $1,000 in state taxes, depending on where they live, if they receive the full $10,000 in student loan forgiveness. These figures could double for Pell Grant recipients, since they’re eligible to receive up to $20,000 in student loan forgiveness.

Planning Considerations for Those Who Haven’t Filed a 2021 Tax Return Yet

Indeed, most taxpayers have already filed their 2020 and 2021 tax returns. However, if you filed an extension for your 2021 return, there are a few strategies you may be able to leverage to help you qualify for student loan forgiveness.

  • First, consider contributing to an eligible retirement plan if you haven’t reached your contribution limit yet. This strategy makes sense is the contribution is enough to reduce your AGI to a level that’s eligible for forgiveness.
  • Income thresholds for married couples filing separately are still unclear. However, if the thresholds for single filers apply to married couples filing separately, you may want to see if changing your filing status will help you qualify for forgiveness.

As you consider these strategies, keep in mind that the extension deadline is October 17, 2022.

Student Loan Forgiveness: Next Steps

The forgiveness process will be relatively easy for most borrowers. For example, federal student loan borrowers already have income information on file with the US Department of Education. Thus, those who are eligible are likely to receive forgiveness automatically.

Of course, there are still many unknowns, including how a potential challenge by Republicans will affect student loan forgiveness. In any event, the official application should be available soon. The U.S. Department of Education sent out a notice recently that it could be available as soon as early October, 2022.  In the meantime, eligible borrowers can receive updates from the Department of Education by signing up here.

Lastly, a trusted financial advisor can help you better understand how student loan forgiveness may impact your financial plan. They can also help you identify other strategies to pay down your debt and reach your financial goals.

To learn more about how Curtis Financial Planning helps our clients take control of their finances, please explore our services and client onboarding process.

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Strategic Charitable Giving: How to Make an Impact with Your Donations While Minimizing Your Tax Bill

Strategic Charitable Giving

Americans are some of the most generous people in the world. In 2021, Americans gave over $484 billion to charity, according to Giving USA’s 2021 Annual Report. More impressive is that individuals represent 67% of total giving, giving nearly $327 billion in 2021.

There are many reasons to give to charity, from feeling good to creating a legacy. Yet charitable giving can also be important from a financial planning perspective.

In this article, I’m sharing three charitable giving strategies to help you minimize your year-end tax bill.

Charitable Giving and Your Taxes

First, let’s review how charitable giving impacts your taxes.

Currently, taxpayers who itemize deductions can give up to 60% of their Adjusted Gross Income (AGI) to public charities, including donor-advised funds, and deduct the amount donated on that year’s tax return.

You can also deduct up to 30% of your AGI for donations of non-cash assets. In addition, you can carry over charitable contributions that exceed these limits in up to five subsequent tax years.

You need to know your marginal tax rate to calculate your potential tax savings. Your marginal tax rate is the amount of additional tax you pay for every additional dollar earned as income. So if your marginal tax rate is 28% and you itemize, you’ll save roughly 28 cents for every dollar you give to charity.

How to Make a Bigger Tax Impact With Your Giving

Yes, you can write checks to your favorite charities throughout the year, and while your donations may be generous, this approach to giving isn’t the most tax-efficient. Here are some ways to give that are:

#1: Donor-Advised Funds

One of the most efficient ways individuals can donate to charity is through a donor-advised fund (DAF). A DAF is a registered 501(c)(3) organization that can accept cash donations, appreciated securities, and other non-cash assets.

One of the advantages of a DAF is that you can take a taxable deduction in the year you contribute to it, even if you haven’t decided which charities to support. You can then invest and grow your funds tax-free within your DAF until you decide how to distribute them.

And, even better than donating cash, you can donate non-cash assets like highly appreciated stock to a DAF and avoid paying the capital gains tax. This strategy can also help you diversify your investment portfolio without triggering an unpleasant tax bill. Plus, you can take an immediate deduction for the full value of the donation (subject to IRS limits).

#2: Bunching Charitable Donations

Bunching your charitable donations can be beneficial if your total allowable itemized deductions are just under the standard deduction. In 2022, the standard deduction for single taxpayers is $12,950 and $25,900 for married couples.

Example:

Let’s say you give $3000 a year to charity, and it doesn’t get you over the standard deduction amount. However, you could go over the standard deduction if you “bunched” your charitable contributions into one year. For example, in 2022, if you gave $9000 instead of $3000 you could itemize deductions and save tax dollars. Then, you would skip donating in the next two years and go back to the standard deduction. Then, in the third year, you would donate $9000 again.

The result will be more significant tax savings over multiple-year timeframes.

#3: Qualified Charitable Contributions

If you’re age 72 or older and have a traditional IRA, the IRS requires you to take a minimum distribution (RMD) from your account each year. In most cases, RMDs are taxable at your ordinary income tax rate. There’s also a steep penalty for not taking your RMD before the deadline.

Meanwhile, if you have other sources of income like Social Security benefits and possibly a pension, your RMD can push you into a higher tax bracket. That means you may pay more taxes than you would otherwise, even if you don’t need the extra income.

The good news is you can donate your RMD by making a Qualified Charitable Distribution (QCD). A QCD allows IRA owners to transfer up to $100,000 directly to charity each year and avoid taxation on the amount.

A QCD can satisfy all or part of your RMD, depending on your income needs. You can also donate more than your RMD, so long as you stay below the $100,000 limit. This strategy can be helpful if you want to reduce your IRA balance and RMDs in future years.

It’s important to note that the IRS considers the first dollars from an IRA to be your RMD until you take the total amount. So, make your QCD before you take any other withdrawals from your account if you want to realize the full tax benefit of this charitable giving strategy.

A Trusted Financial Advisor Can Help You Incorporate Charitable Giving Strategies into Your Financial Plan

Of course, this is not a comprehensive list of charitable giving strategies that can help you make a bigger impact with your donations while lowering your tax bill. Other giving and tax planning strategies may be more appropriate depending on your circumstances and goals.

A trusted advisor like Curtis Financial Planning can help you incorporate giving strategies into your financial plan, so you don’t miss out on valuable tax benefits. Please start here to learn more about how we help our clients and the other services we provide.

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S4E4: How to Thrive in the Digital World with Susan Reynolds

Digital Wellbeing with Susan Reynolds

Improving Digital Wellbeing

In this episode, Cathy interviews Susan Reynolds about improving our tech-life balance and digital wellbeing. 

My guest today is Susan Reynolds. As co-founder of the nonprofit organization LookUp, Susan helps young people minimize the negative effects of technology and lead healthier, more balanced lives. She also teaches, speaks, leads workshops, and facilitates panels to educate and empower Gen Z to find and implement their own solutions to the detrimental aspects of social media and digital distraction.

Previously, Susan was an English and social studies teacher and curriculum developer. In addition, she was the first Director of Academic Technology at the Fenn School in Concord, MA. There, she developed a curriculum that focused on harnessing the positive aspects of technology while mitigating the negative ones. She graduated with a BA from Dartmouth College and a Master’s in Education from Tufts University. As a yoga and mindfulness teacher, Susan brings mindful technology to her work with LookUp’s youth leaders and innovators.

In this episode, Susan and I discuss the harmful effects social media and digital technology can have on mental health and wellbeing.

And how she works with youths to help them take advantage of the positive aspects of technology and mitigate the harmful ones. We also talk about why she believes Gen Z is well positioned to be agents of change, which may also be a tailwind for new legislation that regulates digital media—specifically, the California Kids code. Unfortunately, since we recorded this episode, Susan has shared that California Kids is now facing an even bigger uphill battle than she previously believed due to aggressive push back from tech lobbyists.

Lastly, we talk about the influence the Covid-19 pandemic had on our technology habits, as well as the challenges of undoing some of those habits now that we’re returning to pre-pandemic norms. Susan also shares her definition of digital wellbeing and how it differs from mental health advocacy.

I think digital wellbeing is a really important issue that affects everyone in one way or another.

Susan offers a unique perspective on how we can have better relationships with technology at any age. With that, I hope you enjoy my conversation with Susan Reynolds as much as I did. 

Episode Highlights

  • [12:04] Why technology is so addictive and how it’s contributing to our mental health crisis

  • [20:04] How digital wellbeing relates to self-care.

  • [28:33] The pending legislation around digital wellbeing at the state and federal levels.

  • [41:38] Susan Reynolds describes some of the work her nonprofit LookUp.Live is involved with.

  • [47:29] The effect the pandemic has had on technology and social media habits.

  • [50:08] Susan Reynolds shares her vision for the next five years.

  • [57:30] How people can get in touch with Susan Reynolds and become more involved with the digital wellbeing movement.

Links Relevant to this Episode

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S4E4 Transcript: How to Thrive in the Digital World with Susan Reynolds

Cathy Curtis: Susan Reynolds, thanks so much for joining me on my podcast. I’m excited to talk to you about LookUp.Live.

Susan Reynolds: It’s great to be here, and chat to a different audience. Because I’m usually speaking to teachers and students themselves. But I think speaking to those in the workforce, but as well as any parents or people that work with gen z. It’ll be really relevant.

Cathy Curtis: Susan, you’re making such a good point, thank you for bringing that up. So my audience is other financial advisors like me, mostly independent advisors who run their own businesses. And then also, my clientele is mostly women.

Cathy Curtis: And I have to say that a lot of us advisors use social media in a big way, including me. I started using it back in 2008 to market myself, that was important for me because of my age. It wasn’t to connect with my friends necessarily, it was to market myself.

Cathy Curtis: And I have to admit, as I was getting ready for this podcast, I can relate to so many of the things that those kids are talking about. Because I’ve been using social media for so long. So I know my audience is going to have a genuine interest in what you have to say.

Cathy Curtis: So with that, can you tell us a little bit about yourself? How you founded your nonprofit? And I think it was with your mother, is that right?

Susan Reynolds: Yes. So going back quite a while, I was a middle school English and social studies teacher for 20 years. And sort of, I mean I started self-admittedly my age, but I started teaching in 1986, and ended teaching in 2006. So if we look at what happened in the middle there, technology came on the scene. And I had never really known anything about technology, but I was a curriculum developer.

Susan Reynolds: And so when the headmaster said we hired this director of technology, he’s crawling around in the attic, wiring the school, I need a tech plan. And I said okay, what’s a tech plan? He said go talk to Michael. And Michael was the director who was crawling in the attic. He said go on the internet, and I literally said, and this is 1997, what is the internet? He sent me to the internet, and the interesting thing that happened was I actually felt my brain speed up. I felt this change. So I dug into all this research, and the research literally was saying that, was predicting internet addiction. It was predicting the promise in peril in education for youth. So right off the bat.

Cathy Curtis: This was 1997?

Susan Reynolds: 1997.

Cathy Curtis: Okay.

Susan Reynolds: Tapscott wrote a book growing up digital.

Cathy Curtis: Okay.

Susan Reynolds: So right off the bat. I worked with it, I watched the change as technology came on the scene and the distractibility of it. And I would say that really started watching my students use AOLIM. So they were working on a computer, a word processor, writing a paper with the little box in the corner. And kids weren’t doing their homework. So that gives you a framework of the longevity of this.

Susan Reynolds: I ended up leaving teaching. I wrote a young adult novel, I became a yoga teacher, I became very interested in mindfulness. And I noticed that when I had my phone in my hand, I was not mindful, right? So I started digging in, what is going on? Like why can’t I teach yoga and meditate? But then if my phone is around, I’m totally out of focus, not in the present moment. And at the same time, I learned about the mental health crisis on college campuses.

Susan Reynolds: And for whatever reason I’d sort of missed it. And this was in 2014, and there was a sentence from the Stanford provost that said, college students have never been more anxious, depressed, addicted. I mean self-harming, lonely, isolated, I mean this really tragic sentence. And as I began to dig into this, no one was really talking about what it meant to live in the digital age. No one was really talking about the impact of social media in any causative way.

Susan Reynolds: There was correlative data out there, but there wasn’t anything specifically targeting it. It was just noticing patterns. And so I started how I think a lot of people in my field who were working on these issues start. You start talking to teachers, you start talking to parents, and you start talking from an adult perspective, what students, what youth should be doing.

Susan Reynolds: And I went along like that until I started really talking to college students themselves, and what I recognized is their lives on social media are really very different than our lives on social media. And the reason for that is as they’re developing their identity, their digital identity is woven right into who they are, and I’ll give you an example.

Susan Reynolds: A young woman at Princeton, she’s an athlete, she said Susan I’ve had my Instagram since sixth grade. And so if you tell me to put my phone down, I feel like I’m losing a piece of myself, right? Like I’m somewhat invisible, and that was this recognition of wow, adults are trying to solve the problem for youth, but who’s asking youth about their pain points and what their solutions are?

Cathy Curtis: She was a gen z age person, right?

Susan Reynolds: Yes, this was in 2018. I’m trying to think when I started really working on lookup gen z was really kids born after 1997. So 1995-97. So these youth are now out of college, so around 25. But at the time, it was really focused in on college students and high school students. The only reason I focused in on college students first was I felt like at least high school students had some sort of gatekeeper of their technology, whether parents, whether teachers, the structure of school with such that they could be told you can’t have your phone in a classroom, a parent could take a phone away to sleep.

Susan Reynolds: Now this is not across the board, this is not all parents, we are all teachers. But I felt like if students hadn’t had any sort of training or even thought about regulating their own technology. We were seeing at this time a lot of college students weren’t making it out of freshman year. So it wasn’t really common, but boys might play Minecraft and stay up all night and not do their work.

Susan Reynolds: And I heard about boys in that category coming home, not having have made it through the freshman year. Girls on the other hand, and these are very stereotypical but very general. Social media tended to be what captured girls, and so they could stay up too late. I mean, it interfered with sleep, and then we can get into all of the things that can happen on social media. But just the fact that there was this distraction that was very hard to control.

Cathy Curtis: And this is college-age students like you’re saying, they grew up with it. Maybe they had some parental control maybe as teenagers. But then they get to college and there’s no one supervising them. It’s almost like an extension of themselves, and they’re full on into it.

Susan Reynolds: Right.

[12:04] Why technology is so addictive and how it’s contributing to our mental health crisis.

Cathy Curtis: And it is addictive, right? I mean, if there’s research science whatever that says yes this is an addictive behavior.

Susan Reynolds: Well, and it’s an addictive behavior because more and more research has come out of the algorithmic design of it. And this is a big piece of the whole issue around this is tech companies concerned more about profit than the impact on people. And the algorithms being designed by brilliant neuroscientists.

Cathy Curtis: Right.

Susan Reynolds: But it’s just gotten more and more, the algorithms are smarter.

Cathy Curtis: Well yes, and there’s been leaps and bounds made in brain research in the last decade or two as well. And all those firms are appropriating research to create profit.

Susan Reynolds: Absolutely.

Cathy Curtis: I mean, wouldn’t it be great if they could turn the algorithms around where it created a good healthy environment, instead of the environment we’re in? And I’m sure that’s possible too.

Susan Reynolds: There is a call for it. There is. I don’t think a profit-based model, which I think is why regulation is so needed. Because I mean, tech companies well, any company, right? I mean, any public or private company needs to have earnings. And so the problem, there’s that conflict between the business model. And it’s become, some people call it the attention economy, where our attention is actually the commodity.

Cathy Curtis: So yes, and unfortunately us humans are attracted to scary, sensational things more than we are happy, benign things. Look at the evening news, why did they do that? Ten stories about crime and bad things, before they ever get to one good story, there’s a reason for that.

Susan Reynolds: Right, absolutely.

Cathy Curtis: That’s the way our brains work, and how detrimental when it comes to young people who’s they don’t have the maturity level. But I have to say it’s not just young people, I think older people can get just as addicted.

Susan Reynolds: Absolutely. And I think the question, I mean in looking at the mental health crisis, I mean there’s a mental health crisis across the board, so it’s not saying just youth. But the specifics and the statistics of the mental health crisis among college students is really frightening, and it was frightening in 2014, it was frightening in 2018, and now, this was all before the pandemic. So the pandemic just added to an existing problem. But it also raised the awareness around the impact of living in the digital world, and digital overload was not something I needed to explain. Whereas before, I might need to explain what digital overload and digital addiction was.

Cathy Curtis: Right, no, everybody knows that now. When did you start your non-profit then, in what time frame?

Susan Reynolds: So the example I gave you of the young woman who said Susan, our identities are woven into our phone, it isn’t. It isn’t sort of something outside.

Susan Reynolds: And because if you think about all the socialization in the community and everything that teenagers go through to create a network, to create their friends’ groups, peer pressure and their self-esteem all woven into the digital. So that was a big clue to me. And at the same time my mom, Anne Reynolds have been very involved in non-profits in the bay area around education and mental health.

Cathy Curtis: Okay.

Susan Reynolds: And we have many conversations about this, and so when I said I think I have this idea that what I’m doing educating teachers and parents isn’t really what I want to be doing, I want to be working directly with college students. And I went to Dartmouth college, and Dartmouth’s entrepreneurship center, the Magnuson center for entrepreneurship at Dartmouth, they are open to alumni as well as students and faculty.

Susan Reynolds: And so I spent some time there talking about the issue, talking to students at Dartmouth, hearing their pain points of what it was like living in the digital age, as well as framing it around the mental health issues that they saw on campus. And it was then that Jamie Coughlin, he was the director, he said well, we give founders grants, why don’t we give a grant with a specific question around solving this problem.

Susan Reynolds: And so it all sort of came together, and we used human-centered design and design thinking, and actually ran a design-a-thon at Dartmouth, which asks for identifying the problem and creating solutions. And that’s really where it came about that we offered a grant to students who could solve for digital addiction, digital overload to create more tech life balance.

Cathy Curtis: Oh, that’s fascinating.

Susan Reynolds: Yes, really fascinating. And then we reached out to other universities, and we ended up working with university of Arizona and San Diego University, and the universities worked with us, ran this different design, challenges. Had this big plan to bring all the youth together at BlackRock in San Francisco, because I had given a talk there and voila, the pandemic hit. So we did what everybody else did, right? We brought the whole idea of look up to the digital world.

Cathy Curtis: Okay. And now you have a summit in October, right?

Susan Reynolds: Yes. So it was one of these, I mean it’s sort of any career path or any company or decision you make, all these things just lined up. So the pandemic hit, which made our plans to do everything in person impossible. But we could reach a lot more youth being virtual and we could bring experts and sort of what we call adult allies together with the students, to hear their ideas and give suggestions.

Cathy Curtis: Because the positive side of the internet and digital connection.

Susan Reynolds: Absolutely. And there’s this promise in peril and tech life balance, and it’s not all bad, right? I mean, there’s so many positive aspects of social media and living in the digital world. And I think for students themselves, that was a really important point for us to make.

Cathy Curtis: Yes.

Susan Reynolds: We’re not saying it’s bad. But it’s this constant message and task of how do we take advantage of all the positive aspects, and mitigate the negative.

[20:04] How digital wellbeing relates to self-care.

Cathy Curtis: So, it’s kind of like defining what is digital well-being.

Susan Reynolds: Well, I think it’s in multiple arenas if we just take sort of the work environment right now, the virtual work environment. Digital well-being is managing the digital world in a balanced way. And I mean, it can fold over right into self-care, right?

Susan Reynolds: Some people schedule meetings where they have a 15-minute break. And they don’t use that 15-minute break to check up on emails or check their phone. But they get up and they walk outside and do all these things that boost resilience, boost happiness. And actually, in the long run, make you more productive. So that’s an example.

Cathy Curtis: You can turn on your internet. You can tell your phone let me know if I’ve been on here for too long.

Susan Reynolds: Exactly.

Cathy Curtis: There are tools, I want to tell you a little personal anthem here. So I use Instagram, I have a personal account and a business account. I didn’t know there was an upgrade, because I guess I don’t pay that much attention. So I was using the old version of Instagram for a long time. And I noticed the app got kind of funky, it was hard to use. I thought there’s something wrong here, there’s got to be an upgrade. So I upgraded. And I upgraded to this weird new format that you click on something and then you get all these videos all of a sudden.

Cathy Curtis: And I said oh my gosh, this is what everybody’s talking about. The old platform all you saw was who you wanted to see, this new platform you see who and also all these other people and it scrolls and scrolls and scrolls, that’s done on purpose, right?

Susan Reynolds: Oh, absolutely.

Cathy Curtis: And probably the other app didn’t work, because they really wanted you to switch over to the new app, and now I’m wondering is there any way to turn that off and I just found out there is from another Instagram user that’s frustrated by this new interface. So I mean, I’ve personally experienced this, and I found myself watching these videos, just getting entranced by them. Some of them are really funny, and you it’s an addictive thing, there’s no doubt it.

Susan Reynolds: Well, it’s interesting too, because this is where the profit model comes in. So Instagram is miming itself after Tik-Tok. And one of the problems of these videos is they’re getting shorter and shorter and shorter, and so we’re not able to attend to lengthier videos conversations, right? Because the brain gets trained in needing to switch all the time. So that knowledge of what you can do, what?

Cathy Curtis: Do kids read books anymore? I mean, do they have the attention?

Susan Reynolds: It’s really hard, it’s really hard. And then yes, and if you think about everything being online, your textbooks and reading. I mean, one of the common digital well-being tasks is print out a reading and pick up a pencil and take notes on that hard copy, because that physical act increases your comprehension and ability to focus.

Susan Reynolds: So part of digital well-being is knowing these strategies that help with attention and focus and productivity, so that’s one whole side of digital well-being. And then there’s the whole mental health aspect of it, is not just how long you’re on social media or Netflix or whatever is grabbing your attention, that you don’t intend to be grabbed, I think is one way to think about it. But then what you’re actually seeing on Instagram and Tik-Tok and social media.

Susan Reynolds: And I think for youth, the comparative culture is huge. And even thinking about comparing a curated, right? Totally altered photo of a friend, because a celebrity is one thing, but if it’s of a friend. And then if someone just turns around and looks at themselves in the mirror no makeup, right? No curation, that just that feeling is, so youth don’t feel as good about themselves.

Susan Reynolds: Their self-esteem is really severely impacted. And the other piece that’s really very interesting and probably we haven’t heard of before is quantified personality. So quantified popularity and personality. So what you think is you’re popular by how many likes and followers you have, which is going to lead to more comparison culture, right?

Susan Reynolds: And more not feeling good enough, and FOMO and fear of missing out, keeping you on the devices longer. So that all of the things that you would be doing if you weren’t on the device that would make you feel better is not really happening.

Cathy Curtis: Right. And then the influencer culture, which I’m sure a lot of you think that’s easy to get to and it’s not, and it takes tremendous amount of hours online. But everyone’s following those people.

Susan Reynolds: Right. So what’s been interesting for us with, because this is our third year. The first year, we worked specifically in colleges and then we had sort of an open call for solutions from students, and during the pandemic, it was a little different. We still had digital overload and tech life balance as a question, how might we solve for. But we really asked the other questions where how might we solve for social isolation and loneliness.

Susan Reynolds: Because of the pandemic, so much of this was such a big problem, but also digital activism. So more on that positive side of how might we use these devices, and this was really during the whole Black Lives Matter movement and youth were really feeling very empowered. Because you could be a change agent and you didn’t need transportation, you didn’t need funds necessarily.

Susan Reynolds: So really, listening to students and what they saw were the struggles, and then also talking about what they were doing. And I think it’s very interesting if we look at gen z as a group, they’re very committed to social change and political change, and creating solutions for climate change.

Cathy Curtis: In my work, they’re ESG investors, environmental social governance investors almost 100 percent, they really care.

Susan Reynolds: Right. And gen z is really, they’re also growing up in an era where there are a lot of problems to solve. So it’s so many choices, and they really feel committed to do that. And some leaders, because it’s not everybody, but these amazing leaders out there say it’s really not cool if you don’t have a cause. So there’s a positive, it’s always this positive and the negative.

Susan Reynolds: So the new change agents because we’ve really seen is a potential for regulation and legislation. Because when I started this work, people would sort of say oh yes right. Legislation, you’re not going to get in, that’s not possible.

[28:33] The pending legislation around digital wellbeing at the state and federal levels.

Cathy Curtis: Yes. Didn’t Francis Haugen cause a big shift in that? Because I know legislation has been proposed for years, and there’s been some past, but nothing about this issue. But since she testified, it seems like there’s more and more, and there is a bill pending right now. I would love you to talk a little bit about the legislation that’s pending in California and at the federal level.

Susan Reynolds: Yes, absolutely. So what Francis Haugen’s research did, and the research all the way up into that point. There was a lot of correlative data. But there was arguments or disagreement on whether it was really truly causative. Like whether social media was actually causing harms.

Susan Reynolds: Francis’s data because it was research done by Facebook secretly within Facebook. Where they came out and it was a direct causative relation, that a third of teenage girls were suffering from self-esteem issues, and body image issues from Instagram. So there it was, it was directed. And I think the other thing that happened was in the UK, they passed a bill, an appropriate design code, which I can talk about.

Cathy Curtis: Yes.

Susan Reynolds: They passed it in the UK, the arguments from tech companies was always or often number one, it won’t make a change, and number two, it will take away innovation.

Cathy Curtis: Okay.

Susan Reynolds: What happened in the UK was they found that it did not take away innovation.

Cathy Curtis: In what way? What did they mean by that?

Susan Reynolds: So that those regulations and those strict rules around design, would sort of hamper technological process, and would actually hamper the ability to create better platforms for people’s well-being.

Cathy Curtis: Okay.

Susan Reynolds: But in the UK, they actually saw that it increased innovation, and the changes were having an impact. And so Google let’s say would have to change something, the way they designed it for the UK. But it would fold over into the other design aspects.

Susan Reynolds: And one of the big things is, social media let’s say is designed for a 12-year-old the same way it is designed for a 40-year-old. And so if we think about other products and other regulated laws in the U.S or in the world, that’s not the case. And so the call really was to change the way things were designed for children.

Cathy Curtis: Under the age of?

Susan Reynolds: Under the age of 18.

Cathy Curtis: Okay.

Susan Reynolds: It started with under the age of 13, and these bills are calling for under the age of 18 saying they’re still minors. And a lot of it is privacy, children’s privacy. And what they call the dark box of the algorithm, that there’s no transparency, the companies don’t say how these algorithms are working it.

Susan Reynolds: So the baroness diver came to the U.S herself and helped write a California bill, it’s called the California age appropriate design code. Based on the same issues of designing technology that a child would be likely to use. So likely to use, so even though a 12-year-old is not supposed to be using Instagram, because it’s 13 and up, they are. So how might we design these platforms to be safer.

Cathy Curtis: So let me ask, so in the UK, 12 years and under aren’t supposed to be using Instagram?

Susan Reynolds: That’s across the board, social media is 13 and up.

Cathy Curtis: Okay, that’s it.

Susan Reynolds: I mean, that’s the rule, it’s not followed. And it’s becoming increasingly younger and younger, I mean eight and nine-year-old are on Instagram and Snapchat, and they’re not designed for youth brains. So that’s a big piece of this.

Susan Reynolds: So the California age-appropriate design code has made it through the assembly, two committees in the assembly, the assembly floor, and it just passed through the senate judiciary, and is on its way to the senate appropriations, and then the floor. And this was the first time we as LookUp was asked for youth advocates.

Susan Reynolds: So in our third iteration of the work we’re doing with LookUp, we now have a question about advocacy solutions. And some of the student’s advocacy solutions are involved with storytelling and filmmaking and podcasting, to raise awareness and reach forward. But we actually had youth testify in committee, as well as write petitions and get their peers to sign petitions. And recently, so that’s one California bill.

Cathy Curtis: Is that called the kids online safety act or is that different?

Susan Reynolds: So that’s the senate bill, that’s the federal bill.

Cathy Curtis: Okay.

Susan Reynolds: There’s another California one called the social media platform duty to children act. I mean, we walked around calling them 2273 and 2408.

Cathy Curtis: I bet.

Susan Reynolds: But that one’s very different, that one allows parents to sue the companies for the addictive nature of social media.

Cathy Curtis: That is a very serious bill, isn’t it? Will that pass? I just can’t imagine that, but what are the chances.

Susan Reynolds: Well, they both made it all the way through senate judiciary, and now they’re going on to appropriations. I think they’re both going on to appropriations. But the interesting thing about these bills, not in the assembly floor, but in committee, they’ve passed unanimously. And they’re bipartisan bills as well, that’s really exciting.

Cathy Curtis: Authored by both republican and democrats initially, right? Yes.

Susan Reynolds: Absolutely, yes. So it’s not a polarized issue, it’s coming across both parties. The big opponent is the tech companies themselves, because they don’t want this. But from LookUp’s perspective, it’s a whole new arena for us that youth are really powerful.

Cathy Curtis: It must be so exciting, for you, your organization and everyone else involved in this.

Susan Reynolds: Yes, it is.

Cathy Curtis: It must be, because it’s kind of coming to a head in a way.

Susan Reynolds: We think it is, and the idea of California, is if California passes these bills, it just leads the way, not only for other states to pass it, but internationally. Because a lot of countries the European union, Australia, a lot of countries have bills pending. So all it’s going to take is a certain amount, and then the tech companies it’s just going to make sense to just do it across the board.

Cathy Curtis: Right. Going back to the California bill, describe it briefly the main points in that bill. If it passed, what would happen? What would change?

Susan Reynolds: So it would require tech companies to design social media differently.

Cathy Curtis: Okay.

Susan Reynolds: It would, to work on the algorithmic design and explain, to work on taking away some of the addictive nature. Not to save data of youth, not to provide, to keep adults who youth don’t know away from them. So it’s really thinking about the health and safety of children

Cathy Curtis: Okay. So taking an example of a young girl for example, that in this Instagram thing, where their self-esteem gets affected by what they see. Will anything in that bill help that situation? As for in the algorithms or what would happen then?

Susan Reynolds: Well, I think the first thing they would have to do is be transparent about how the algorithms work, and change what youth see. So more body positivity. But also, I mean there’s a whole sexuality piece and sextortion, and the ability for adult predators to contact youth. I can’t tell you how many, particularly young women say they have been propositioned or contacted by men seeking.

Cathy Curtis: If you don’t have a private Instagram account as a woman.

Susan Reynolds: It’s shifting those things and putting pressures on the companies.

Cathy Curtis: Okay, gosh and August 1 is the vote, is that correct?

Susan Reynolds: The appropriation, it might be next Tuesday, for the appropriations.

Cathy Curtis: Could be in August one, yes. Could be August on the articles, but that’s already passed.

Susan Reynolds: Yes. Up until appropriations Cosa, the kids online safety act, that’s the national bill with similar privacy laws. Again, from my perspective, the fun thing was there were 28 senators, so 28 states. What we’ve started to do is build a database of youth in California, trying to figure out what counties they’re in. So that was a piece of it. We as adults learned this whole legislative process, but youth are learning it too. And seeing that it matters and that they can actually make a difference.

Cathy Curtis: And when you say youth, these are your staff [Inaudible 00:37:21.06]

Susan Reynolds: So youth I would say is anywhere from 13 to 25. I think in some situations, an op-ed written by a 16- or 17-year-old is even more desirable. But a 24- or 25-year-old talking about their former self, and talking about the harms to them and mental health issues or other issues that have come up is very powerful.

Cathy Curtis: It is, I’ve watched several of them. I’m really intrigued by this your staff, your executive director is very young, right?

Susan Reynolds: She’s pretty young, she’s in her 30s.

Cathy Curtis: Okay, she looks younger than that, okay. But still, you have an extremely youthful stuff.

[41:38] Susan Reynolds describes some of the work her nonprofit LookUp.Live is involved with.

Susan Reynolds: Absolutely, and that’s really a real mission of ours. My executive director before was a friend, we’ll just say in the baby boomer generation. And what we really see look up is this infrastructure to empower, embolden, support financially and with mentorship their innovations, their advocacy, their campaigns for a healthy and safe digital world. I mean, that’s sort of the framework we really look at. And actually, all of their innovations are advocacy. A lot of, well, when the Netflix documentary the social dilemma came out, we were really lucky to have a contact and partner with them.

Susan Reynolds: So our first as we were mentioning our youth for youth summit, we’re coming up our on our third one in October, was partnered with the social dilemma. And so the social dilemma was one of the, was sort of the precursor to Francis Haugen. It revealed a lot of the harms in a documentary that just in a viral way went all over the world. And in our summit, we had the director, Jeff Orlowski, he was the keynote and he really spoke specifically to the youth, and really talked to them about how important they were to the movement, and how to be a change agent.

Susan Reynolds: So it’s been this constant life events happening that really coincided with what we were doing, and brought us in many ways to the next level, [Inaudible 00:40:02.09]

Cathy Curtis: You’re really focusing on that now.

Susan Reynolds: On the advocacy?

Cathy Curtis: Yes.

Susan Reynolds: I think in the beginning, we had a lot of students from an entrepreneurship standpoint create an app, a digital well-being app. We have moved, it’s very difficult to get a startup like that off the ground, and our programs are.

Cathy Curtis: Nobody would know about that have got off the ground, that were developed?

Susan Reynolds: By us, no. What ends up happening is, so we have had this amazing group of young women at Stanford, they created an app called ASMBL, they created it during the pandemic. It was to be a non-addictive platform for all types of social change agents. So they worked on it, got their MVP, their most viable product out.

Susan Reynolds: And just they were going to Stanford, they were competing tasks. And what ended up happening to two of these young women is they said we have to put ASMBL on the shelf, but they are advocates for the movement. And Chloe Schrager was able to go to class with Barrack Obama. So Barrack Obama came and spoke at Stanford and he really spoke about the digital movement in general, and Chloe was able to sit in a class with him, they chose 10 students.

Susan Reynolds: And so she is still a spokesperson for a safer and healthier digital world. So from an app perspective, I don’t think any have really gotten off the ground. And one of the problems with it as well is there are companies working on these digital well-being platforms, and they’re having a hard time as well, right? Just from again because you’re in that profit model.

Susan Reynolds: So an example of an innovation that’s continuing to grow is a young woman Maddie Freeman interviewed Jeff Orlowski, she made her own 15-minute documentary and tied it to a digital detox program called no-so November, so no social media in November, she’s in Colorado. She started this because she saw so many friends and peers die of suicide, so it’s a very mental health focus. But she has developed this campaign that she is promoting and schools are taking it on.

Susan Reynolds: And she learned very quickly that no so November doesn’t mean no social media November. You could take the whole month off from social media. But she gives tips for different ways to take a break from social media. So that’s an example of yes, it’s using a technical platform in the sense of she’s made a film that’s embedded in a website. So it’s a digital solution to spread the message, but it’s not a specific app.

Cathy Curtis: Right, yes. I can imagine developing an app will be tremendously hard.

Susan Reynolds: Well, and I think the other thing they’re finding is, particularly the students that started during the pandemic, that all of a sudden, these apps aren’t needed as much. Because they were developing them for a need that was occurring because we were living through a pandemic.

[47:29] The effect the pandemic has had on technology and social media habits.

Cathy Curtis: Now that the pandemic is waning a bit, what do you see trends changes happening? I’m sure kids were on social media more over the last few years, right? I mean, it didn’t spike in some tremendous amount, thirty percent usage or something?

Susan Reynolds: Yes, and so the problem is changing that habit, getting back in person, getting back outside. I do think one of the debates has been what do you do about schools? Like do you allow phones in schools, how do you do it? How do you regulate it? And I was just speaking with a school in Massachusetts, who it’s a K through nine school, five through nine, has some boarding students, and they’re actually instituting the yondr pouch, which is way y-o-n-d-r.

Susan Reynolds: Which is a pouch that you put your phone in and it locks it up during the day, and then it unlocks it when you leave school. And I was speaking to another middle school teacher, which is really interesting the way it circles back to teaching middle school. She said Susan that is so draconian, don’t you think that they should be learning to regulate it, and I said not in middle school, no. Because if nobody has their phone, no one has their phone, you’re not missing out on anything. One person has their phone and is checking social media, then the rest of them, you’re missing out.

Susan Reynolds: And I also think one of the reasons this is so powerful is when kids go to camp, they go to camp and there’s no phones, many camps say just absolutely no phones. I asked a group of seventh graders, and have any of you gone to camp without phones, a bunch of them raised their hand and tell me about it, oh so much better, so much less stressful. I had so much more fun with my friends, I had better relationships with my friends, and this is middle school and high school.

Cathy Curtis: Yes, so I believe that.

Susan Reynolds: I mean, we can’t live like that, so the trick of digital well-being so to speak is how do we create an environment enough, so that we don’t lose those in-person activities, right? The things that actually boost our mental health I mean.

[50:08] Susan Reynolds shares her vision for the next five years.

Cathy Curtis: Yes. And you don’t develop those addictive behaviors where you don’t even want to talk to your parents at night because you have to be on your phone, I’m sure that happens in a lot of families, very painful. So well, a lot of what you’re saying is very positive. What do you see, I mean as far as the work being done. What do you see, like what’s your vision for the next five years, and what could change and happen?

Susan Reynolds: Well, someone had said what’s your vision for LookUp? I mean it’s not very realistic, one of them is that they don’t need us anymore, right? I mean, I think it’s growing a movement, and allowing more youth, when I say youth, really we work with 18 to 25. High school is just more difficult, because under 18 requires different types of parental permission. And so we’re working, actually we are, youth catalyst is another nonprofit in Oakland, and seven of their youth from actually seven bay area high schools have an internship with us, and they are our marketing company. Are the marketing firm so to speak for the youth for youth summit, that this will be October 15.

Susan Reynolds: And the youth for youth summit is a great way for adults to see what youth are doing, because it’s all run by youth, moderated by youth, youth panels. And it’s really exciting to hear what they’re doing around advocacy, their solutions for mental health. And so one of the things that’s really new that we’re doing this year is we’re bringing in speakers, these amazing sort of awarded mental health advocates in high school and college, to have them discuss the mental health issue, introduce the concept of digital well-being in the digital age, to this group of youth, bringing in that perspective.

Susan Reynolds: Because mental health advocacy has been around longer than digital well-being advocacy, or just because. And so what can these youth learn? What can our youth who are just beginning this advocacy work, particularly when we think about legislation. What can they learn from the mental health advocates? So as we move forward, I keep coming back to my original concern, right? The mental health crisis among college students.

Susan Reynolds: The only reason I say college students and not middle school and high school students, is that’s a population that we can work with in providing solutions and innovations. And they are the biggest speakers for high school students.

Cathy Curtis: Okay.

Susan Reynolds: Sort of this trickle down the peer mentor, right? Just a couple years younger is easier to listen to than someone much older.

Cathy Curtis: Yes, that makes so much sense to me. So how do you define the mental health crisis with college students, talk about that just a little bit.

Susan Reynolds: So it was interesting. I was just listening earlier today to a webinar by Laurie Santos, Professor Laurie Santos who has the happiness lab, that some of you may have heard of, she’s out of Yale. I hadn’t heard statistics recently. But the concern is that, many colleges, I mean over 50 percent, I didn’t write down her current statistics, feel stressed and overwhelmed. Many feel depressed and anxious so much that they can’t get up and do their work.

Susan Reynolds: One in 10 college students has contemplated suicide. So there’s just a trend of having a really hard time in day-to-day life. And so Laurie’s came from college students from schools like Yale, but it’s not specific to high-powered universities, it’s pretty much across the board. So this sort of lack of hope, and I do find in working with students who are working on a problem, they are more hopeful. But all of the self-care processes of exercise, right? Spending time face to face with friends without devices, spending time in nature, right? All of these things that we know we’re good for us, they’re really good for us.

Susan Reynolds: And so youth and adults who spend time on technology, we sort of like we still have this human body. We still have the ancient brain, we still need people. We still need our tribe, we still need our in-person community. And keeping that alive for the next generations and providing that is just so important to being a human being. Because interestingly enough, our brains have not really changed. We still live in, with the sympathetic nervous system and a parasympathetic nervous system, and our sympathetic nervous system goes into fight, flight or freeze. Technology creates fight, flight or freeze.

Cathy Curtis: Well, what you just said was so beautiful. I think that’s a good time to end our podcast, that statement about how to live life with friends, nature, giving attention to things that make you feel good is so important.

Susan Reynolds: Yes, it’s so important. And so people who say what do I do first? I said well, I just call it the three S’s. Can you study without your phone? Can you sleep without your phone? And can you socialize without your phone and try one. Like the sleeping without your phone just changes everything, especially for kids.

[57:30] How people can get in touch with Susan Reynolds and become more involved with the digital wellness movement.

Cathy Curtis: Yes, that’s good. The three S’s. I like that, perfect. Share with the audience, well, how can we as adults help your advocacy in this movement for digital wellness.

Susan Reynolds: Well, I mean, right here with this group, I mean mentorship for, because each team that gets a grant from us, we provide them with a mentor. And it’s interesting, one of our mentors is a life coach, and it’s been really helpful for her to help them prioritize, they are working on an advocacy campaign, and organizing youth that are interested in working with them. Different types of financial support, project management support. So mentorship is just a one-on-one.

Cathy Curtis: Okay. So tell us how that would work, what would someone need to do to become a mentor?

Susan Reynolds: So they would just reach out to me, Susan@LookUp.Live. I mean, we have a newsletter. Our website is LookUp.Live, which was interesting when you’re getting a website, I mean LookUp is the white pages and the yellow pages, right? So it was hard to get a URL for that. But it really sort of is Look Up and live your life. I mean, it’s the first step of looking up from your phone or your device, or your technology.

Cathy Curtis: Okay, excellent.

Susan Reynolds: And I think the other, we have been really lucky in getting grants from some family foundations.

Cathy Curtis: When you say lucky, I bet it’s not all luck. I bet it’s not all luck, I’m sure you write a really good proposal with really good reasons why you should have grant money.

Susan Reynolds: Well, I mean, we got a grant for advocacy and it just coincided beautifully that we could articulate a real need for it, because of these bills in California. But introductions in knowing organizations that give out grants for youth mental health. The digital piece is new, but it coincides so beautifully with any organizations that support youth, underserved youth just example of providing internships for high school students in the bay area from under-resourced schools.

Cathy Curtis: Right. And then the summit, talk about how you can attend the summit.

Susan Reynolds: So I believe the registration link is live on our website, it’s the Y for Y summit, and it is on October 15th. And it’s a great event that you can come to for one panel or you can hang out all day.

Cathy Curtis: Okay. Do you ever think you’ll go back to live, have you talked about that?

Susan Reynolds: The summit, probably not. But we did have an event in June where we brought five of our leaders together in the bay area, to meet other advocates. And then they spent the day lobbying in Sacramento together, meeting with different senators. So face-to-face is the best, I mean it’s absolutely the best. And so working on more local regional meetups.

Susan Reynolds: It’s amazing though when you bring youth together virtually, and it doesn’t cost any money. I mean, probably across the board for companies finding the profit margin, right? I mean, a virtual versus in person, because if you think about it, we flew five youth to the bay area. We had two others who lived here, but flew them to the bay area and housed them, and so really figuring out how to create more in-person events and locally.

Cathy Curtis: You mentioned BlackRock, were they going to sponsor?

Susan Reynolds: They were going to sponsor our collaborative summit. Yes, you’re right, that’s another example that we, I gave a talk to the women of BlackRock organization, and her name is Diana Angelini.

Susan Reynolds: She invited women from other companies, and I spoke in, they have a, BlackRock in San Francisco and maybe in New York too has as a floor that is like a WeWork. And so it was a perfect collaborative space to bring youth together with mentors, and have them share their ideas. So that’s another great, right? Providing a meeting space.

Cathy Curtis: Yes, I know that space in San Francisco, that’s a great space. Good for them for sponsoring.

Susan Reynolds: I know, unfortunately, the date was April 2020.

Cathy Curtis: Oh dear, well, maybe next year, right?

Susan Reynolds: Absolutely.

Cathy Curtis: We don’t know, we still don’t know when this thing’s going to stop.

Susan Reynolds: Exactly.

Cathy Curtis: It really would be nice to have a live event, considering what you do.

Susan Reynolds: Very much so.

Cathy Curtis: Well Susan, thank you so much. Fascinating topic, and thank you for what you’re doing. I know my listeners are going to just enjoy this so much, and hopefully, sign up for the summit or somehow otherwise get involved.

Susan Reynolds: Yes. And if you have a 16- to 25-year-old that’s really fascinated with this topic, we would love for them to join. I mean, and our grant applications will be up soon and so there’s a lot of ways to get involved.

Cathy Curtis: Okay. Now what does that mean to join for our youth?

Susan Reynolds: So coming to the youth for youth summit, definitely. And we will be opening the 2023 applications to come up with solutions, we’ll be opening that up in September.

Cathy Curtis: Okay, good to know.

Susan Reynolds: And we are also building an advocacy branch that’ll be on the website probably in the next month, to create a database of youth who say I want to participate in the advocacy, I’ll write a letter to my senator, I’ll sign a petition. I want to do a little thing, maybe not a big thing, to be part of that.

Susan Reynolds: And the other thing we’re adding is community service hours for high school students, any work done with Look Up. So there’s another avenue as well.

Cathy Curtis: Perfect. By the way, I was on your website and there was a pop-up to contact your senator, you could fill out a form to contact your senator about this coming up bill in California. So that’s another way.

Susan Reynolds: Yes, that’s another way, absolutely.

Cathy Curtis: Yes, okay great. All right Susan, I could talk to you all day about this, we had a lot of things, but hopefully we got the message across odd and clear about what you do, and frame the problem and hopefully solutions will come.

Susan Reynolds: Absolutely.

Cathy Curtis: Yes. Okay, have a good.

Susan Reynolds: Okay, you too.

Cathy Curtis: All right, bye.

Susan Reynolds: Bye.

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9 Things You May Not Know About Social Security Retirement Benefits

Social Security Benefits

On the face of it, Social Security benefits seem straightforward. You simply fill out some paperwork when you retire and start receiving your monthly amount.

Unfortunately, many people do just that. They may glance at their Social Security statement now and then but don’t put much thought into it beyond that. Meanwhile, others may assume they’re not entitled to benefits and leave money on the table.

The truth is many people don’t maximize their Social Security benefits, either because they don’t understand how the system works or they need the money before reaching their full retirement age. Once you’re aware of Social Security’s many nuances, you can use the system to your advantage.

Here are 9 things you probably didn’t know about Social Security benefits (but should):

#1: Reaching age 62 is significant when it comes to Social Security.

When it comes to claiming Social Security benefits, a variety of important things take place when you turn 62.

First, the Social Security Administration officially calculates your benefit amount when you reach age 62. That’s because 62 is the age you can begin claiming benefits if you choose. Up until this point, the benefit information on your Social Security statements is merely an estimate.

Of course, that doesn’t mean it’s always wise to start your benefits at age 62. In fact, by claiming your benefits at age 62 instead of when you reach full retirement age (currently, between age 66 and 67 depending what year you were born), you may decrease your monthly benefit amount by as much as 30%.

You’re also eligible for cost-of-living adjustments (COLA) beginning at age 62—even if you don’t claim your benefits right away. Since the Consumer Price Index determines COLA, eligibility can pay off in high-inflation years. For instance, some groups are estimating the increase will be as high as 10.8% in 2023 to account for rising price levels.  

#2: Your Social Security statement now shows you how much your benefits will increase each year by waiting to claim them.

Indeed, the Social Security Administration recently redesigned their statements to clearly show the differences in your benefit amount based on the year you start taking them. And you don’t have to wait until you’re eligible for Social Security to see what this means for you.

Check it out! Go to ssa.gov and set up an account, so you can view your Social Security benefits at any time.

#3: You must work at least 10 years (40 credits) to qualify for Social Security retirement benefits.

Once you’re eligible for Social Security benefits, your highest 35 years of indexed earnings determine your benefit amount. Index means that the SSA adjusts your actual earnings to account for changes in average wages over time. However, if you keep working after claiming your benefits and report higher wages, they will replace one or more lower-wage years with your higher earnings.

For example, many women leave the workforce or cut back their working hours to raise children and restart their careers later. Those later years of earnings will replace the zero or low-wage years, thus increasing the ultimate benefit amount. This can also apply to people who change jobs to start their own business or work for a start-up and take a temporary pay cut as a result.

#4: Your Full Retirement Age (FRA) is an important milestone.

Your full retirement age (FRA) is the age you’re eligible to receive your full Social Security retirement benefits. It’s important to note that full doesn’t necessarily mean maximum, however.

If you were born between 1943 and 1954, your FRA is 66. For those born between 1955 and 1960, FRA then gradually increases until it reaches 67. Anyone born in 1960 or later reaches their FRA at age 67.

Reaching your FRA is significant for several reasons:

  • Reaching your FRA does not mean you have to start taking benefits. You can delay your benefits until age 70.
  • Each month you delay taking benefits after reaching your FRA, your benefit increases. This is true until age 70. For example, if your FRA is 66, you can increase your benefit amount by as much as 32% if you wait until age 70 to claim your benefits. Your benefit amount at age 70 would also be roughly 77% higher than if you began claiming Social Security benefits at age 62.
  • If you claim your benefits before reaching your FRA and continue to work, you may be subject to the SSA’s Retirement Earnings Test. This may reduce or even eliminate your benefit temporarily. For example, the Social Security earnings limit is $1,630 per month or $19,560 per year in 2022 for anyone receiving benefits prior to reaching FRA. If you exceed these thresholds, you can expect the SSA to withhold $1 from your benefits check for every $2 you earn above the limit.

Remember: Everything about Social Security supports work. So, your benefit will continue to grow as you continue working and your earnings increase.

#5: Age 70 is another significant age when it comes to Social Security benefits.

You must start taking Social Security benefits by age 70. Delaying past age 70 will not increase your benefits. However, any cost-of-living adjustments will apply.  

If you work past age 70 and your earnings are higher than any of the previous 35 years used to calculate your benefit, your benefit will increase. Those higher earnings will replace a year where you didn’t earn as much.

#6: If you’re married, divorced, or widowed, it pays to understand your spousal benefits.

As with many government benefits, there are many rules when it comes to Social Security spousal benefits. The following flow charts may come in handy to determine your eligibility.

In the meantime, here are a few basics that are good to know:

  • A lower-earning spouse can collect a spousal benefit up to 50% of the higher earner’s FRA. Meanwhile, a widow or widower can collect up to 100% of the deceased spouse’s benefit.
  • Because a widow or widower can collect up to 100% of a deceased spouse benefit, it makes sense for the higher earner to max out their benefit by waiting until age 70 to claim.
  • It may pay to keep tabs on your ex-spouse if you were married for at least 10 years. A divorced spouse can file for a spousal benefit even if the ex-spouse has not yet claimed if both parties are at least 62 years old and have been divorced for more than two years.
  • If your ex-spouse dies, the picture changes. As the surviving ex-spouse, you can claim a survivor benefit as early as 60. You can also allow your own retirement benefit to grow until age 70. Alternatively, you can claim a reduced retirement benefit early. Then, you can switch to a higher survivor benefit at full retirement age.
  • If you’re married, you must wait until the higher earner files for benefits to claim benefits on their record.

#7: Benefits are taxable at the federal level and potentially at the state level.

In 2022, you must pay taxes on your Social Security benefits if you file a federal tax return as an individual and your taxable income exceeds $25,000 ($32,000 for married couples filing jointly). If your taxable income is between $25,000 and $34,000 ($32,000 and $44,000 if filing jointly), you’ll pay taxes on 50% of your benefit amount. For income levels above those thresholds, you’ll pay taxes on 85% of your benefit amount.

In addition, most states don’t tax Social Security benefits. However, some do, so be sure to check your state tax requirements.

#8: Beware of the Windfall Elimination Provision (WEP)

If you also receive pension benefits based on earnings from jobs that Social Security doesn’t cover (and therefore aren’t subject to the Social Security payroll tax), the windfall elimination provision (WEP) may reduce your benefit amount. WEP reductions don’t appear on your Social Security statement. So, they can come as a surprise if you’re not aware of it.

#9: The Government Pension Offset (GPO) may affect your spousal benefits.

The Government Pension Offset (GPO) affects spouses, widows, and widowers with pensions from a federal, state, or local government job. It may reduce your Social Security benefits in some cases. Specifically, if you receive a pension from your government job and didn’t pay Social Security taxes while you had that job, the SSA will reduce your spousal benefits by two-thirds of the amount of your pension. There are exemptions, however.

To Maximize Your Social Security Benefits, Consider Working with a Financial Professional

Social Security is a complex topic that many people don’t fully understand. While the above list certainly isn’t exhaustive, hopefully it gives you a better understanding of how the system works. It may also give you a starting point to do your own research.

In addition, consider working with a trusted financial advisor, who can help you maximize your Social Security benefits. A financial advisor can also help you develop a comprehensive financial plan for your future, so you can retire on your terms.

To learn more about how Curtis Financial Planning helps self-made women and female-led households secure their financial future, please start here.

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S4E3: Simple Strategies for Improving Your Grief Literacy with Kathi Balasek

Simple Strategies for Improving Your Grief Literacy with Kathi Balasek

A Helpful Guide to Grief Literacy

My guest today is Kathi Balasek, an educator, empathy and grief literacy coach, university lecturer, speaker, and widow advocate. Kathi teaches financial professionals how to improve their grief literacy communication skills to best serve bereaved clients. She also hosts the One Well Widow podcast, helping widows process their grief and learn from one another.

After experiencing the financial uniqueness of widowhood firsthand and learning that 70% of widows leave their financial advisors within the first year, Kathi leveraged her many years of teaching, coaching, and personal experience to create Grief Smart Advisor as a tool to help professionals retain, connect, and support clients experiencing loss, grief, and widowhood. Through her coaching programs, webinars, workshops, and speaking engagements, she trains leaders to build trust and empathy with their clients so they can support them during the toughest moments of their life.

Kathi earned a Bachelor of Science degree in Education at Montana State University and a Master of Arts degree in Education with a concentration in Kinesiology. Moreover, she is currently a lecturer at California State University, Chico in the Department of Communication and Education where she trains future teachers and athletic coaches. Indeed, Kathi has a passion for motivating leaders to develop communication skills that engage and connect.

Grief Literacy in Practice

In this episode, Kathi shares her personal story of widowhood and how she came to realize the importance of grief literacy. We also talk about the financial challenges women, in particular, tend to face when losing a spouse. And why with a million women becoming widows each year in the U.S., it’s critical for us to prepare for the unpleasant probability that we’ll have to manage our finances on our own one day.

Furthermore, Kathi offers alternative phrases to “I’m sorry for your loss” that may be comforting to people who are grieving. In addition, she shares her thoughts on how to respond if you learn about someone’s death indirectly—for example, through social media.

Meanwhile, be sure to listen to the end, as Kathi explains what she wishes more people understood about grief. Kathi also suggests a variety of resources that can help both widows and advisors to widows.

I really enjoyed my conversation with Kathi Balasek, and I hope you do, too. Whether you’re going through the grieving process yourself or you’re an advisor who works with widows, I think you’re going to find this episode and her unique insights extremely helpful.

Episode Highlights

  • [08:16] What people don’t always know about grieving families, and how they can talk about death better—especially with children.
  • [09:36] Kathi Balasek describes her work as a grief communications coach.
  • [12:37] What is grief literacy?
  • [16:00] Kathi Balasek explains why it’s so important for women to take an active role in their financial lives, even if their partner takes the lead.
  • [19:15] The current state of widowhood in the United States.
  • [22:33] Kathi Balasek shares an example of how she’d train a financial advisor to prepare their women clients for widowhood.
  • [29:54] The differences in how women and men communicate and why they matter for grief literacy.
  • [32:36] Alternative phrases to “I’m sorry for your loss.”
  • [34:22] How to respond when you learn about someone’s death indirectly, like through a Facebook post.
  • [40:24] Why food and practical gifts are better than flowers when someone dies.
  • [43:07] Kathi Balasek shares her tips when it comes to recommending other professionals to their widowed clients.
  • [46:05] The biggest mistake Kathi sees her clients make and the one thing she wishes people understood about grief.
  • [49:20] Recommended resources for widows and advisors of widows.

Links Relevant to this Episode

Kathi Balasek’s Website

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S4E3 Transcript: Simple Strategies for Improving Your Grief Literacy with Kathi Balasek

In this episode, Cathy interviews Kathi Balasek, an empathy and grief communications coach.

Cathy Curtis: Hi Kathi, welcome to Financial Finesse. I’m really happy you could do this podcast with me.

Kathi Balasek: Well, hello Cathy. It’s a privilege to be here. I’m honored that you asked.

Cathy Curtis: Great. I thought we’d start by you telling us your story about widowhood, just to get started.

Kathi Balasek: Absolutely. So my life, I had it all, once upon a time. A wonderful husband, beautiful children, a career and until I didn’t. And in my 30s, I became a widow faced with raising five children on my own. My husband died of a long battle of brain cancer. And so, I basically went from soccer mom, to caregiver, to widow and really facing a whole lot of years ahead of me.

Cathy Curtis: So let me step back, so you were married very young?

Kathi Balasek: I was married, and three of my children were my step children.

Cathy Curtis: Okay.

Kathi Balasek: From my late husband. And the icing on the cake is that after he died, I was so afraid that I was going to lose those children, and I actually gained those children. So I raised five kids. I’m happy to know that they all graduated from college. Now I’m an empty nester.

Cathy Curtis: Congratulations.

Kathi Balasek: Life is good, but it wasn’t always good.

Cathy Curtis: Gosh, first off, so sorry that happened to you, that sounds absolutely devastating. But obviously, you’ve thrived.

Kathi Balasek: I did, because I did the work. I think anybody listening to your podcast who’s gone through grief, number one you have to do the work. You have to get into group support, grief support, counseling whatever you can do and whatever you can afford, because that process was one, two or three years.

Cathy Curtis: Did you know that you needed that back then? I mean, you were young. So did you right away join a group?

Kathi Balasek: No. Right away, I probably spent a year just getting my kids off to school and going back and going to bed, and then setting an alarm to go pick them up. That first year is just really difficult to even face, and the reality and things still need to get done, so it’s exhausting.

Kathi Balasek: But there came a point, I had a wonderful support system, I have just the rock star parents that gave me some tough love. And they said he’s not coming back, and you have to show up for these five kids. And we will help you, but you got to get some help, you’ve got to get counseling and it was what I needed to hear.

Kathi Balasek: Because when you’re grieving, the memories, you kind of wear this little grief cloak around and it’s comfortable. And the memories are comfortable, and the pictures are comfortable, and then pretty soon, it’s not comfortable, it’s debilitating. And so there comes a time where I had to face that the grief, it was okay to move forward, I wasn’t losing the relationship with my husband, that will never end. I just had to release the pain.

Cathy Curtis: Yes. And I’m sure having those children, maybe forced you a little bit more to face reality. Because you can’t be grieving, prolonged grieving around young children either?

Kathi Balasek: No, and they’re not your grief buddy. They’re dealing with their own grief. And we did a ton of counseling with my children, because they were all different ages.

Kathi Balasek: And I’m telling you, grief psychologists and counselors, especially ones who work with children, they know what they’re doing. And the one thing that I always remember from them, and I still think about now, is children will only ask what they’re ready to hear. And so, so many adults say I bet you miss your dad or I bet you do this, that’s not helpful.

Cathy Curtis: Yes. You’re talking grief language now.

Kathi Balasek: Yes.

Cathy Curtis: Which is so difficult for people.

Kathi Balasek: It’s very difficult.

Cathy Curtis: Do you miss your dad? Yes, that would be.

Kathi Balasek: Yes, like no kidding, thanks Einstein for the question.

[08:16] What people don’t always know about grieving families, and how they can talk about death better—especially with children.

Cathy Curtis: Yes. What would be the appropriate question to ask a child in that case?

Kathi Balasek: What’s really important for people to know in grieving families is to keep their dad’s name alive, talk about I loved your dad. I remember a story about your dad, I remember when you were born. Because it’s been 15 years since my husband passed away, and my adult children still love to hear people tell them about their father, and tell a memory and that never goes away. We learn to walk alongside grief, it never goes away.

Cathy Curtis: Yes. So really, what you’re saying is don’t ask questions?

Kathi Balasek: Well, don’t ask questions unless you know what to ask. I mean, you’re not allowed to ask my child an emotional question about the death of their father.

Cathy Curtis: But people don’t know that, so that’s where okay, so this is where what you do comes in. You’re a grief communications specialist or what other term would you call?

[09:36] Kathi Balasek describes her work as a grief communications coach.

Kathi Balasek: You could call it coach, consultant. I work with companies and professionals, specifically in the financial realm, who really help widows and I help them learn to communicate correctly with grieving people, what to say, what not to say. How to prepare your practice up front, before the catastrophe happens.

Kathi Balasek: All of those things, I work with companies because grief literacy is normalizing conversations surrounding grief and loss, because we live in this death denying culture where we don’t want to talk about it. We don’t want to ignore it. It makes people uncomfortable, because we don’t want to put ourselves in my shoes, because that’s somewhere that nobody ever would want to go.

Cathy Curtis: Yes. So they’re so much a part of life, it so strange that our culture has that aversion to facing up to it, it’s facing up that it’s part of life.

Kathi Balasek: Yes. I mean, I don’t remember the exact quote that Margaret Mead said something about when somebody is born, it’s like this elation. When they’re married, it’s jubilation, when they die, we ignore it. And it’s true. It’s what happens. And when somebody’s grieving, it can be very isolating, okay.

Kathi Balasek: Because their whole life changed, especially if it’s the surviving spouse, their whole life changed, their income changed, housing decisions, all of those things. Social, their routine changes, all of these secondary losses. And what happens is that becomes very isolating. And so when people don’t acknowledge someone’s pain, grief or loss, it’s even more isolating.

Cathy Curtis: Yes, and that’s where joining the groups, finding groups that are of people going through the same thing, it’s valuable, because then you won’t feel as isolated.

Kathi Balasek: Right. And being in groups, that’s like side-by-side understanding. But where grief literacy is, the overall population learning where to connect with the griever, and that’s in the language of knowing what to say.

Cathy Curtis: Is grief literacy your term?

Kathi Balasek: No, it came from Kenneth Daca, who is a famous researcher writer on grief.

[12:37] What is grief literacy?

Cathy Curtis: Tell us a little bit more about grief literacy, explain the premise and some of the terminology.

Kathi Balasek: Okay. So grief literacy, it’s. How I help professionals with grief literacy, is I kind of give them like a grief 101 course. When you don’t acknowledge people’s pain, that’s disenfranchised grief. It wasn’t acknowledged by you, by your company, in our conversations, it was just dismissed.

Kathi Balasek: We also talk about anticipatory grief. So many financial advisors that I work with have clients that are experiencing a health diagnosis, putting somebody in long-term care, being the caregiver. Well, even though the death hasn’t happened, they’re experiencing grief, and it’s called anticipatory grief.

Kathi Balasek: So a lot of things we go over is just learning about what types of grief your clients may be experiencing, and what you can do to help them.

Cathy Curtis: So valuable. I’m a financial advisor, and I work with individuals primarily. And I have many clients that have gone through these various grief stages either through death, or like you said, severe illness of a spouse, going into long-term care and it is very hard, it’s a very hard time for them.

Cathy Curtis: And I think that I’m very empathetic and I have great communication skills and all that, but this is a specialized area, it really is. So I welcome that I found you, that you offer this kind of training.

Kathi Balasek: Well, I think it’s very specific, and I think it’s very needed. And as career professionals, you’ve been doing this forever, I’ve been a teacher and educator forever. We start to see the gaps, and we start to see the needs, and when over 70% of widows leave the financial advisor within the first year, and the number one trait that widows want is communication skills, our communication skills.

Kathi Balasek: So you start to see okay, how can we help advisors become grief literate? So that they can retain clients, attract new ones, build a reputation of that great bedside manner so to speak with people, and really get prepared for what we know is coming.

Cathy Curtis: I have to say, I’ve heard that stat many times. That 70% of widows leave their advisor. And I have to say, I think it starts way before. The communication starts way before the death of a spouse, where they need to be more inclusive of the spouse in the conversation, so that they don’t want to leave after the death, right?

[16:00] Kathi Balasek explains why it’s so important for women to take an active role in their financial lives, even if their partner takes the lead.

Kathi Balasek: Absolutely. I was in that type of marriage where I didn’t really show up to the meetings with the financial advisor. I was in that, a traditional sense where I completely trusted my husband to do that. It wasn’t really what I wanted to do, so I didn’t. And then, once he died, I felt such guilt that I hadn’t taken a role. I was ashamed that I didn’t understand financial terms, which made it really difficult to show up to my advisor.

Cathy Curtis: This is not an untypical situation.

Kathi Balasek: No. Especially in the like boomer age women, that had this traditional approach, and there’s so many things that advisors can do to start having these conversations up front. Several ways to invite both parties to the party, basically. Both parties to the meetings, the events, there really should be equal representation.

Cathy Curtis: Yes. And this isn’t just for heterosexual couples, any couples, both parties.

Kathi Balasek: No, any couple.

Cathy Curtis: It is so important that they participate in the finances, and know where the money is. I can see where one person may be stronger financially than the other, maybe takes on a little bit more of a role.

Cathy Curtis: But I don’t think that’s an excuse for the other person to completely ignore everything. And I mean, that’s good while you’re living, but it can be completely devastating if you’re not prepared when one person dies. There is no doubt about it.

Kathi Balasek: Exactly. And I get a lot of questions from advisors like how do I make that happen? I’ve invited them to the meeting. Well, you have to continue inviting in a variety of different ways. Maybe it’s a phone call, maybe it’s talking to the one client one-on-one that I really want the other partner here. Maybe it’s an email, maybe it’s a women’s event. It’s not a one and done hey, I took the shot, I missed, didn’t happen.

Kathi Balasek: You have to really look at how women relate, and they’re very rapport driven, very conversational and they’re not driven by numbers, goals, data. They’re driven by how can my long-term planning affect my life and my experiences and what I want to do with this money.

Kathi Balasek: And so, it’s a different conversation, and you have to really develop those conversational topics with women, because the reality is, and the statistics say eighty percent of men die married. So the longest advisor, relationship you’re going to have is going to be with a woman and most likely they’ll be a widow.

[19:15] The current state of widowhood in the United States.

Cathy Curtis: Interesting. So give us the statistics on widowhood right now in America.

Kathi Balasek: So over a million widows per year in America, and the average age is 59.

Cathy Curtis: That’s unbelievable.

Kathi Balasek: So you’re really looking at a lot of years ahead. So you think if their average is 59, they’re probably still working, they probably have children in the home. So we have to modernize the face of widowhood, it’s not our grandmother who’s 95 knitting in a rocking chair.

Kathi Balasek: So the sooner professionals can start really thinking about this is a way I can help, but this is a huge opportunity. Huge opportunity because of this huge wealth transfer that’s coming, and widows are going to be first in mind, for that intergenerational wealth transfer, and they’re going to be dual inheritors.

Kathi Balasek: They inherited from a parent and then they’re also inheriting from a spouse. And people are like oh, that’s kind of like the Fox in the hen house, no, it isn’t. It’s being honest, looking at the numbers and you’re in the best opportunity as an advisor to champion widows.

Cathy Curtis: I agree, you can be of huge help to a woman that is, knows that they need help and does have a financial advisor. Not all people have financial advisors, not all widows do. So I mean, do you ever counsel women individually or do you do more of the professional training?

Kathi Balasek: I do two things. I work with financial or insurance professionals, somewhere in that realm and I do group trainings of both men and women. Like these are the financial advisors, I’m going to teach you how to be grief literate. And I also train with webinars and companies where we train your team.

Cathy Curtis: Okay.

Kathi Balasek: So I love opportunities where I can work one-on-one. I currently have a group course going with eight students, because I like the small group, and they’re independent financial advisors and they’re just killing it. They’re getting more clients; they’re becoming known for working with bereaved clients and they’re just building a confidence and competence of knowing what to say.

Cathy Curtis: So let us know about one of your lessons. So you’re training an advisor to become more grief literate, or maybe to prepare their women clients for the possibility that could happen, right?

Kathi Balasek: Okay.

[22:33] Kathi Balasek shares an example of how she’d train a financial advisor to prepare their women clients for widowhood.

Cathy Curtis: So give us an example of what you would tell a financial advisor to do to prepare their women clients.

Kathi Balasek: Okay, excellent. So I think I believe in preparation in everything, okay. That’s the controllable piece, right? So one thing I work with a lot with advisors of really getting a system and organizational process for all of the tasks and paperwork that you know your client is going to need to do that first year, okay. That can be set up.

Kathi Balasek: What’s in the first column, what’s in the later, what’s in the middle. And having those processes all set up, what does the surviving spouse do? And their family, which tasks do they do? Which ones need a professional help?

Kathi Balasek: And so it’s a checks and balance so we have that set up. I have them set up protocols for exactly what you would say on the phone, because you’re going to be the one of the first calls, right? So what do you say if they don’t answer the phone? What do you leave on the message? Do you go to the service? Do you not go?

Cathy Curtis: Interesting. What do you say to that? What is your advice?

Kathi Balasek: Go. So if they were your client, you go. And you can find out through either an obituary or a funeral or service home, if it’s a certain specific religion, or if they’re only taking friends and family. You can do some homework to figure out if they don’t want you there.

Kathi Balasek: But much if they were your client, you’ve reached out to them, they’ve reached out to you, go, and know exactly what to say. You say three things, you mentioned the person’s name, I’m so sorry for your loss, I loved and appreciated your husband, James. He was such a light when we would come to our meetings, and I remember a story of and then you’re just going on.

Kathi Balasek: Nothing to do with finances, right? But you you’re preparing that. Because this is very awkward, it’s like Bambi standing up for the first time, a baby deer, it’s awkward. So we have to practice and script it. So a lot of my work is practicing, scripting what you would say so it sounds authentic.

Cathy Curtis: And you know there’s nothing wrong with scripting. If it’s helpful to the client and the person, I believe in that too, I really do.

Kathi Balasek: It’s fundamental to communication, like any fundamental. I mean, Steph Curry who’s one of the best basketball players as you know because we’re in the Bay Area, he still works on fundamentals, he’s no different.

Cathy Curtis: How many free throws does he do a day.

Kathi Balasek: Exactly. So if you want to sound authentic, you have to write it in words that you would say. You have to practice it in the mirror, or try it with the family member, and really watch about your eye contact, your body language, because when you meet with a bereaved client, they’re going to remember 10% of what you say, 90% of how you made them feel.

Kathi Balasek: And when you can show up authentically, and you’re saying the right things, and you’re listening to learn not listening to solve, you’re going to get that safe space created initially with your client, and that’s really what you want.

Cathy Curtis: That’s a beautiful thing, so well said.

Kathi Balasek: Thank you. Trying to think other things, we set up some protocols for the first office visit, that’s another thing you can prepare up front, is not all people want to come to your office, okay. Give them some choices.

Kathi Balasek: We could meet at your home, we could meet at a neutral space, all of those things. Set up a protocol of this is what you could expect, send them out an email of really how that first meeting will look, you follow it up with an email of the next steps.

Cathy Curtis: Because that’s going to be the first meeting you have alone, right? With this person?

Kathi Balasek: Yes.

Cathy Curtis: Who may or may not know the details of the family finances?

Kathi Balasek: Absolutely. So it’s important to build trust, to build a safe space. Simple things that we don’t think about, when I’m meeting somebody for the first time, just eye contact and me writing notes builds trust. It’s the little things that ounce by ounce by ounce pretty soon you have a client that trusts you.

Cathy Curtis: What do you think the advent of Zoom meetings is doing to this process? Do you still think you can convey your feelings and thoughts and emotions across the screen to a grieving person?

Kathi Balasek: I think, number one, if it’s the mode of communication that your client desires, then that’s where you start. And ideally, I mean, I don’t love Zoom, I’m a college professor, I like to be with students out and I’m animated. However, I have to go where my clients need me. And so, I think that message needs to be first. The mode of communication is based on what your client needs.

Cathy Curtis: Right. Well, and also a lot of advisors now have clients all over the place, because of the pandemic, and people seem, it’s easier for clients to hire advisors anywhere.

Cathy Curtis: So they find an advisor that specializes in what they want, they hire them, it could be across the country. So you’ll have to communicate in that way. So I guess it’s learning the skills to work with the bereaving person over an electronic media.

Kathi Balasek: Well, and to be real Cathy, is like you and I just met.

Cathy Curtis: Yes.

Kathi Balasek: And yet, we spent four or five minutes getting to know one another, we already found connections, similarities, shared purposes. We care about what each other are doing, and that was done on Zoom.

Cathy Curtis: Yes, women are really good at this, what you just described though.

[29:54] The differences in how women and men communicate and why they matter for grief literacy.

Kathi Balasek: Right. Men communicate differently. There are different communication styles. One is not better or the other. I mean, I think it as the Ying and the Yang, we need both, okay. And communication styles, women are more conversational, they add more personal information, they’re very rapport relationship driven.

Kathi Balasek: Where men are very report driven, data, facts, processes, goals, vary in order. And this is not all men or women, but this is general communication style. So it’s really recognizing in an advisor scenario where your client resonates, and really talking to them in their language.

Kathi Balasek: Because I think back of your question about grief literacy, and grief is like a universal experience, but it’s not a universal language, it’s a foreign language to many of us. And so when we say things that divide, like we try to justify somebody’s death or we say oh, at least they lived a long life, or it’s it was God’s plan or all of these things that just.

Cathy Curtis: What about the, I’m so sorry for your loss.

Kathi Balasek: Okay, that’s been done, right? I mean, if you are going to be, I’m just going to put it in terms that makes sense to me. It’s I don’t take offense to what people say, people don’t know any better yet, because they haven’t met me yet.

Kathi Balasek: My charge is I’m going to make everybody grief literate. When they say I’m sorry for your loss, that is not going to encourage a conversation, and what we want is we want to say things that build connection, and further the conversation.

Kathi Balasek: And so, saying I’m sorry, that’s a sentence starter, okay. It’s not an envy, I’m sorry for your loss, it’s been said. And if you want to stand out from the crowd in your life and in your industry, you got to do more.

[32:36] Alternative phrases to “I’m sorry for your loss.”

Cathy Curtis: Tell us an alternative phrase or phrases.

Kathi Balasek: Okay. Saying things like I was sorry to hear about your mother’s death. I didn’t know her well, but I can imagine knowing you, that you had a lot of qualities that she possessed. What’s one thing that you really loved about your mother? You see I’m pulling you in, I’m showing that I care. I’m acknowledging that I didn’t know your mother. Or you say something like if you want to start, I’m sorry for your loss, because that’s a sentence starter.

Kathi Balasek: I’m so sorry for your loss. I read about your husband’s passing, and I knew him on a couple occasions. And what I really appreciated about John, was that he always put what I wanted to say first. He always made the conversation about me, even though I was there for him, and that selflessness I will never forget. You see how I am actually saying their name, I’m acknowledging the person’s loss, and I’m telling a memory. What will be remembered, that is what is supportive and it’s soothing.

Cathy Curtis: Yes. Just taking it out of the realm of the client advisor thing for a minute, even people use social media now to announce the death of somebody, Facebook, for example. And you’ll see all the responses, and a lot of them are I’m so sorry for your loss.

[34:22] How to respond when you learn about someone’s death indirectly, like through a Facebook post.

Cathy Curtis: What would be a better way to respond when somebody, because obviously they’re posting it on social media, so they want people to know and they know people are going to respond in some way, right? What would be a better way to respond in that instance?

Kathi Balasek: So when somebody dies, not everybody knows. I mean 20, 30 years ago if you didn’t read it in the obituary, you didn’t know. But now somebody dies, and that evening it’s on Facebook. So when you see something on social media, you have some options.

Kathi Balasek: The best option is if you knew that person, write them a card. Call them, private message them, okay. Grief and sending these condolence messages out in the world, it’s not a true representation of truly how you feel. So why don’t you take that opportunity of I just read that information I have this news, how about I make a phone call? How about I write a letter? How would I drop something off?

Kathi Balasek: How would I send something? It comes back to we have the information; the receiver wants to know that you actually spent some time really thinking about their loss and really doing something that was meaningful.

Kathi Balasek: We think we can just go to the sympathy card aisle, grab a card, sign our name. Well, it’s so much richer if you write from a blank note card, and you write three heartfelt sentences, sign your name. I have a whole box of my cards that I got, the ones I re-read were the personal messages.

Cathy Curtis: I so agree with you. I’ve had death in my family, and I saved the cards that someone wrote something that really touched me, and they really do help.

Kathi Balasek: They help. I mean, as fundamental as that sounds, that’s something I teach my students in my class. My advisors they don’t know what to write or if a client lost a child, or if a client got a cancer diagnosis, they don’t know what to write.

Kathi Balasek: That’s the piece of my curriculum. It’s the simple fundamental human processes that are missing that is leaving this gap in between a griever and somebody who truly wants to help them but doesn’t know how.

Cathy Curtis: Right. And it’s not, I mean, it’s not to say sending a card that already has a grief message in it is okay, but you’re losing such an opportunity to make somebody feel better and really let them know that you care.

Kathi Balasek: Yes.

Cathy Curtis: The time to do that in a deeper way, and your message is loud and clear, and I so agree with you.

Kathi Balasek: Well, when you think about it, when advisors are working with really this family’s whole life savings, can’t you spend about 15 minutes to write a heartfelt card? Because a sympathy card, nothing really nails it, okay. Nothing really does.

Cathy Curtis: It’s because we don’t know what to say, we don’t know what to say. So the sympathy card makes it easy to check that box off. But it’s uncomfortable, because we’re uncomfortable with death, it’s true.

Kathi Balasek: And completely normal, right? That is completely normal to feel awkward, uncomfortable, don’t know what to say.

Cathy Curtis: Even procrastinate on sending something. Beyond the point that you’re embarrassed to even send it.

Kathi Balasek: Yes. And so our hearts are wired for compassion, but our head gets in the way and we’re like oh, I shouldn’t say this or I shouldn’t do that or that might be helpful then pretty soon we talked ourselves out of it.

Cathy Curtis: Exactly.

Kathi Balasek: If you think they need something, like I bet they would love a case of beer. I bet they would love some juice boxes, because they have kids, just go buy it and drop it off at their house.

Cathy Curtis: I just had a client who lost his wife, and I know the casserole thing, but people need food, they don’t want to cook for themselves after somebody dies.

Kathi Balasek: No. It is kind of a running joke in our household, but it’s so helpful and practical. And I can remember one of my teenagers, this was way after John died and somebody else had had a death in the neighborhood. And my teenager said yes, wait till the casserole starts showing up, it’s true.

Cathy Curtis: Do people still do that?

Kathi Balasek: Yes.

Cathy Curtis: Okay.

Kathi Balasek: There’s a ton of like apps and websites where you can do meal trade, and you can plan on who’s giving what and all of that.

Cathy Curtis: Okay.

[40:24] Why food and practical gifts are better than flowers when someone dies.

Kathi Balasek: Food is very helpful, it’s comforting. It’s a gift card to order out, stamps and blank note cards, just practical things that people don’t think about. I recently pulled a group of widows, and I’m in several widows group, but I’m also on the advisory board for modern widow’s club. And the number one thing that widows did not want were flowers, what did we all send them?

Cathy Curtis: Flowers.

Kathi Balasek: Not only did I just see my husband die, but now you said your flowers, they’re going to die, now I got to throw them away.

Cathy Curtis: Yes. And you have to take care of flowers.

Kathi Balasek: Exactly.

Cathy Curtis: At a time when you probably don’t want to take care of anything else but yourself. You have to change the water and make sure it’s not stinky, and all that stuff you have to do with flowers.

Kathi Balasek: I think people they genuinely mean well. There are so many caring individuals, there are so many people that do things in the death and grief area that they know what they’re talking about. And I’ve learned so much from people I’ve met, research I’ve done, that that’s truly supportive to a family. And it’s basic things that you don’t really think about.

Kathi Balasek: As an advisor, you should be the best resource on the planet for your bereaved client. Who am I going to call if I have a broken pipe in the middle of the night? When you are solo suddenly, alone, female, you don’t want a stranger coming to your house.

Cathy Curtis: Yes. Your door all of a sudden won’t open, which just happened to me this morning. My husband’s away.

Kathi Balasek: Exactly. I didn’t know how to buy a car, okay. I want to come to my advisor and say who could you send me to. Who could I give your name to that would not take me at the car place?

Cathy Curtis: No. I know with my own experience that being a resource, having vetted resources for your client, as vetted as you can, is so important to clients in so many areas of their life and not just financial.

[43:07] Kathi Balasek shares her tips when it comes to recommending other professionals to their widowed clients.

Kathi Balasek: It is. So that’s a piece of my program that we really work on is that curated list, of vetted professionals that you could recommend to your bereaved clients, because it’s an overlooked thing but it’s something you could do right now in the preparation phase.

Cathy Curtis: Yes. And carry that through to all other aspects of your financial planning too, vetting professionals for your clients, but particularly in this area it would be so welcome and needed.

Kathi Balasek: Yes. I think of caregiving, okay. So how many people come to you and they need caregivers, or they need advice or professional. This is an opportunity for you to find the best caregiving professionals in your community.

Cathy Curtis: Best practices in vetting professionals?

Kathi Balasek: For me, I don’t have that a piece of my program. But my recommendation is whoever you recommend, you should have called or known first.

Kathi Balasek: And so that when you say to your client, I would like you to use my name when you call, because I know this person, and I’m referring you to this person that I trust. That’s the biggest recommendation. I mean, I have people I know, but I have people I wouldn’t recommend. And we know people in our community and we know who would be a better fit for somebody else.

Cathy Curtis: Right. What I do typically is if I don’t know the professional personally, or they haven’t worked with the client, I will refer them, because usually they’re referred to me by somebody I trust, and I’ll make sure my client knows that. I have not worked with this person before, but they were referred to me by somebody I really trust, and let them know, so they’re aware that I don’t specifically know their work.

Kathi Balasek: Right. I just think honesty, and I think women are very much a word-of-mouth type of community. I’m reminded when my kids were young, I didn’t have to go see which teachers I wanted for my children or which hairdresser to go to, I just asked around and it gets around, okay.

Kathi Balasek: If you want to go to this restaurant, this is what they’re known for, this teacher is what they’re known for and it gets around. I didn’t have to go google it or research it, we talk. And when you are an advisor, if you can get dialed in to your community of who’s the best, I mean, why wouldn’t you recommend that.

[46:05] The biggest mistake Kathi sees her clients make and the one thing she wishes people understood about grief.

Cathy Curtis: Yes, exactly. So it sounds like you’ve worked with quite a few financial professionals, what would you say is the biggest mistake that they make with a grieving client?

Kathi Balasek: I think the biggest mistake they make is they don’t invest the personal side up front. They think about all the things that have to be done, and the financial things that have to be done. And those first couple meetings really need to be just about building a safe space, listening to your client, learning about your client, helping them get organized.

Kathi Balasek: And I think they rush in with too many like we’ve got to get this done, we’ve got to get that done, what do you think about, what will you do next year. It’s like widowhood is like a thousand-piece puzzle, putting back the pieces where you don’t even know the picture on the box, okay. You can’t even picture that, okay.

Kathi Balasek: And going in with too much information, financial information up front, because grief fog is that cognitive impairment that grievers feel and it can show up in forgetfulness, confusion, overwhelm so they’re not going to remember it anyway.

Kathi Balasek: And so really invest in the trust, the communication, knowing the players. Who’s at home taking care of all of these things? Who in the family is communicating with what? And really helping them so that nothing falls through the cracks.

Cathy Curtis: Kathi, what would you say is the one thing that you wish more financial professionals or even people in general understood about grief?

Kathi Balasek: That’s a tough question, but I love that you asked it. I think the number one thing that every human needs to understand is that grief has no timeline. It’s not linear, and in all these stages, it is all over. And one person’s grief, some of the signs and symptoms might be several years, some might be shorter.

Kathi Balasek: And I think as people, we tend to go into a little bit of disillusioned expectation like hey it’s been three years, aren’t you over it yet? And it really tends to disenfranchise somebody’s grief and work, and grief never leaves us. It’s not a hurdle we get over. It was the end of a life, not an end of a relationship and grievers learn to walk alongside.

Cathy Curtis: That’s a good perspective, thank you for that. So I’m sure listeners would, I mean you have so much knowledge in this area, it’s obvious. And you’ve done a lot of research, and I’m sure you’ve got some resources that widows or advisors of widows could use. Do you mind sharing a few?

Kathi Balasek: I would love to. So again, there’s just so many people doing great things out there, it’s unbelievable. I feel privileged to be a part of the puzzle. And so number one, if you have widow clients, the best resource you can give them is send them to modern widows club.

Kathi Balasek: It is an international, non-profit, I’m actually on the advisory board, which that was a whole honor. And it’s the only widow group that is actually doing research on this demographic. And so they have research supported evidence of what helps widows move forward, helps them thrive, and they have community outreach groups all across the world, and so that you can get connected with other widows.

Kathi Balasek: You get all different types for financial, emotional, social all these things that will help you move forward as a widow. So it’s awesome, I highly recommend that. And the person who created it, Carolyn Moore is a widow herself and she and I actually shared a stage speaking at a financial advisory convention, and she’s just remarkable what she’s done.

Cathy Curtis: Thank you for that. You yourself have a resource I believe?

Kathi Balasek: Yes, I have a couple. Like if you’re a financial advisor too is anything by Cathy Sikorski on caregiving, and she talks a lot about how to talk about these difficult conversations, she’s great. Grief literacy, Megan DeVine, it’s okay that you’re not okay. These are excellent books.

Kathi Balasek: And I believe that if you get to know me and work with me, I’m going to help you grow your business. I have programs, I have coaching programs, I have an online course. I can do a webinar for your team and we can train your team of really getting grief literate, so that you can connect and engage with bereaved clients.

Kathi Balasek: I really enjoy seeing the advisors and the companies that I’ve worked with because they’re seeing success. They’re truly knowing how to show up with their bereaved clients, because it’s happening all around us. This is what we will never avoid. And we have to not practice it during the fire drill, we have to do it up front. And it’s just been a ton of fun getting great resources out to my clients that can truly support them in becoming the best advisor they can for their clients.

Cathy Curtis: So I’m going to add this to my show notes, but in case people don’t read the show notes, how do they reach you?

Kathi Balasek: So my website is KathiBalasek.com, and if you just want to email me, it’s Kathi@KathiBalasek.com.

Cathy Curtis: And that’s Kathi?

Kathi Balasek: Yes.

Cathy Curtis: Okay.

Kathi Balasek: And if they have widow clients, I also run a podcast called One Well Widow, where I help widows moving forward.

Cathy Curtis: I’ve listened to it, some of the stories are so sad, but really great podcast.

Kathi Balasek: Thank you. So that’s my kind of advocacy of helping widows.

Cathy Curtis: Okay, excellent. Thank you. I’ve really enjoyed talking with you, Kathi. And I look forward to re-listening to this podcast myself because I learned many things. So thank you for your time and what you do.

Kathi Balasek: Well, you’re welcome. It’s a privilege. I’m just so excited to meet women like you who are forging ahead and leading us all. So, thank you.

Cathy Curtis: Okay Kathi, take care.

Kathi Balasek: You too. Cheers.

Cathy Curtis: Cheers.

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3 Tips for Successfully Navigating Gray Divorce as a Woman

3 Tips for Successfully Navigating Gray Divorce as a Woman

Women tend to face a variety of unique financial challenges when separating from a partner. When it comes to successfully navigating gray divorce, preparation and the right team of advisors are key.

Divorce over age 50—commonly referred to as “gray divorce”—is becoming increasingly common in the United States. Although the overall divorce rate has been declining since the 1990s, there’s been an upward trend in gray divorces over the same period, according to the U.S. Census Bureau.

No one gets married with the intention of divorcing. Yet the reality is that divorce happens—and it happens more often than we’d like to admit. And while divorce can be devastating at any age, the financial consequences for those who divorce later in life tend to be far worse for women than for men.

If you’re a woman navigating gray divorce, protecting yourself financially is critical. Here are a few tips to help you obtain an equitable settlement and maintain your financial independence post-divorce.

When it comes to navigating gray divorce, consider the following tips:

#1: Get Organized

Data shows that the average person spends two years thinking about divorce before taking action. If you’re considering divorce, be sure to familiarize yourself with the household finances. This is especially important if you’ve let your spouse take the lead for most of your adult life.

On the other hand, if your spouse is considering divorce, you may not have ample time to prepare. But if you sense any shift in your marriage, getting financially organized can’t hurt—even if divorce never comes to fruition. Indeed, researchers estimate that 90% of all women will be solely responsible for their household finances at some point in their lives.

Here are a few organizational tips for navigating gray divorce and taking charge of your financial life:

  • Keep a record of all financial accounts, property, and other assets owned by you and your partner. You should also classify all assets as separate or marital property.
  • Be sure to save copies of all corresponding documents so they’re readily available if you need them.
  • Do your best to locate all estate planning documents, prepaid funeral arrangements, and premarital agreements, if applicable.  

Other examples of information you may need during the divorce process may include:

  • Personal balance sheet/financial statements
  • Inventory of joint and separate property
  • Bank and investment account statements
  • Real estate deeds
  • Mortgage/loan documents
  • Credit card statements
  • Wills/trusts
  • Insurance policies

In addition, keep track of your login credentials for online access to all relevant financial accounts and information. Creating an organizational system in advance can help make the process easier for you and your team of advisors if you find yourself navigating gray divorce.

#2: Assemble Your Team of Experts

Once divorce is on the table, you’ll want to begin assembling a team of legal and financial experts. Many people immediately tap their network for help once navigating gray divorce becomes their reality. However, taking your time to carefully select a team of experts can ultimately save you time, money, and unnecessary stress.

As you assemble your team of advisors, consider the following specialists:

  • A divorce attorney or mediator to help you navigate the legal aspects of divorce and advocate on your behalf.
  • A Certified Divorce Financial Analyst (CDFA) who can help you gather and document household financial details, as well as determine a fair division of assets.
  • An estate planning attorney, especially if you have young children. You’ll need to recreate all relevant estate planning documents after you divorce.
  • A divorce coach or therapist to help you navigate the emotional aspects of divorce.

If you don’t have recent appraisals for real estate and other highly valued property, be sure to obtain your own professional appraisals. In addition, consider adding a financial planner or tax professional to your team to help you determine the tax consequences of various settlement scenarios.

Finally, beware of the unpleasant possibility that your partner may try to hide assets from you during the divorce process. Finding hidden assets can be challenging, but it’s not impossible.

If there’s no obvious paper trail, past tax returns can be a helpful place to start. Alternatively, if you suspect your partner may be hiding a substantial amount of money or property from you, you may want to consider hiring a professional who specializes in asset search and investigation. 

#3: Choose Your Divorce Process

There’s no one-size-fits-all approach to divorce. The best approach typically depends on your family dynamics, as well as your personal and financial circumstances. Nevertheless, you typically have four options when it comes to navigating gray divorce.

  • Do It Yourself. With this approach, you and your spouse work out the details of your divorce without the assistance of legal advisors and other experts. A DIY approach may save you time and legal fees if you and your spouse are divorcing amicably. However, you may also leave yourself open to an unfair settlement, since you don’t know what you don’t know.
  • Traditional Representation. You can retain an attorney for the length of your divorce or hire a consulting attorney to assist you when necessary. With either option, you’re at the mercy of the law and the court system. This can be time-consuming and expensive. But it can also protect you if the divorce is complicated and/or contentious.
  • Mediation. With this approach, you have a neutral facilitator—typically an attorney who specializes in family law. Their only role is to listen and make sure both parties are heard. That means they can’t advise on financial matters related to navigating gray divorce. This may be problematic if there’s a power imbalance or one party isn’t acting in good faith.
  • Collaboration. Rather than a winner versus loser approach to divorce, collaboration aims to troubleshoot and problem-solve. Importantly, both parties and their attorneys agree not to litigate. Instead, the teams bring in whoever is needed to help make the process run as smoothly as possible. If either party goes back on their agreement, the party who litigates must find new counsel.

A Trusted Advisor Can Help You Take Ownership of Your Finances After Navigating Gray Divorce

Unfortunately, navigating gray divorce doesn’t end once the divorce proceedings conclude. As you adjust to your new life, it’s important to take ownership of your finances so you can thrive independently.

It’s possible that your divorce settlement may be all you need to sustain your lifestyle post-divorce. Nevertheless, you’ll want to develop a personal budget and long-term financial plan that reflect your new circumstances.

Additional post-divorce considerations may include:

  • Social Security benefits. If you’re divorced but your marriage lasted at least 10 years, you can still collect benefits on your ex-spouse’s record. This is true even if they have remarried, but not if you remarry.
  • Insurance needs. The two primary types of insurance that typically come into play during a divorce are health insurance and life insurance. Be sure to revisit your policies and ensure you have proper coverage post-divorce.

Lastly, if you haven’t worked with a financial planner in the past—or your partner took the lead in the family finances—consider engaging a trusted financial advisor. Your advisor can help you take control of your finances, identify your blind spots, and secure your future.

If you’re navigating gray divorce and looking for a financial partner to help you maintain your financial independence and make smart decisions for your future, Curtis Financial Planning may be able to help. To see if we’re a good fit, please start here.

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