Women and Money

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 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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The Complete Guide to Buying a New Car as a Solo Woman

Buying a New Car As a Solo Woman

The world continues to evolve in many ways. However, when it comes to buying a new car, it often feels like stepping into a time machine—especially if you’re a solo woman.

Data shows that women buy 62% of new cars in the United States and influence 85% of all car purchases. Yet many car dealers are still ripe to take advantage of female shoppers, at least according to the numbers. In fact, one Yale study has repeatedly found that car dealers offer higher list prices to women than men, by about $200 on average.

Indeed, there are likely many reasons for this discrepancy. Still, one way to ensure you get the best deal when buying a new car is to prepare accordingly before signing the papers.

Luckily, my husband Rob handles all car purchases in our household. Because even though I’m financially savvy, I know what I don’t know when it comes to cars. However, I remember many frustrating experiences buying a new car as a solo woman. I hope this article helps the next time you’re in the market for a new vehicle.

Tip #1: Do Your Homework

Kelley Blue Book reports that women are twice as likely as men to be undecided on new vehicle type. Unfortunately, walking into a car dealership with no plan in place leaves you open to potentially unsavory sales tactics.

To avoid making a purchase that you may not be happy with in the long run, be sure to do your research ahead of time. Websites like Edmunds.com, Kelley Blue Book, and Car and Driver provide in-depth information on pricing, safety, and other features. You can also read reviews to understand how certain cars measure up against others.

In addition, visit the dealership’s website ahead of time to familiarize yourself with what they have in stock and the respective sticker prices. That way if the dealer directs you to the most expensive version of a particular vehicle, you know if there are more affordable versions available.

Lastly, once you know which cars you’re interested in, go directly to the corporate website—for example, Acura.com or Ford.com—to see what deals they’re currently offering. Many times, brands will offer incentives that can reduce your final price significantly.

These steps may seem tedious, and it may not excite you to research cars online. However, the more information you have ahead of time, the better deal you’re likely to receive when buying a new car as a solo woman.

Tip #2: Know What You Can and Can’t Negotiate

Depending on the market environment, you may have limited room to negotiate the final price of your vehicle. Even so, it’s helpful to know what you can negotiate when buying a car as a solo woman, as well as what’s set in stone.

First, know that the MSRP—the Manufacturer’s Suggested Retail Price—is just that: a suggestion. As independent franchises, car dealers have the latitude to sell the cars on their lot for any price they choose. In other words, the MSRP should be the starting point for your negotiations.

To better understand your ability to haggle the MSRP, you should also know the dealer’s invoice price and the car’s market value. The invoice price is how much the dealer paid the manufacturer for that vehicle. While you can ask the sales manager for the invoice price, websites like Consumer Reports may provide more straightforward information. In addition, Edmunds.com and KBB.com can show you what other people in your area have paid for similar cars recently to help you determine the fair market value.

So, what can’t you negotiate? Taxes and registration fees are non-negotiable when buying a new car. In addition, dealers won’t negotiate the cost of transporting the vehicle from the factory to the dealership. But beware of dealers attempting to add a second freight charge to the final price of the vehicle. This fee should be negotiated down or eliminated—and may be a sign that you don’t want to do business with that dealership.

Finally, keep in mind that some dealers are moving towards “no-haggle” pricing, especially if you’re looking at a used or certified pre-owned car. If this is the case, typically your only room for negotiation is on your trade-in value, financing terms, and the price of any add-ons.

Tip #3: Know What Your Trade-In Is Worth

If you plan to trade in your current vehicle when buying a new one, doing your research ahead of time is essential. Many dealers will assume you don’t know what your vehicle is worth and intentionally try to low-ball you on price. They may also try to tell you your car is in worse condition than it is.

When buying a car as a solo woman, don’t begin any negotiations until you know what your trade-in is worth. A good place to start is KBB’s “My Car’s Value” tool. Simply enter your VIN or make and model and answer a few questions about features and overall condition. KBB will then quote you a private sale price, trade-in price, and instant cash offer. Typically, the price you can realistically get for your trade-in falls somewhere between the trade-in price and instant cash offer (assuming the information you enter is accurate).

However, in certain cases you can get a better offer for your car than the Kelley Blue Book value. Therefore, it’s also helpful to check online dealers like Carvana and CarMax. Carvana gives you what they call a “real offer” for your car in less than two minutes. CarMax will also give you an instant offer online.

These three resources will give you a pretty good idea of what you can reasonably get for your trade-in. Once you have a quote from each, be sure to take screenshots or print them out so you can show the dealer what others are offering for your vehicle if necessary.

Tip #4: Understand Your Financing Costs

Unless you plan to pay in cash, you’ll likely need to finance the cost of your new vehicle. Unfortunately, the financing discussion can be one of the most confusing aspects of buying a new car as a solo woman if you don’t prepare ahead of time.  

One of the best ways to prepare is to know your current credit score. Most credit bureaus and credit card companies let you check your primary FICO® Score for free. You also have a separate FICO® Auto Score, which dealers use to determine your creditworthiness.

If your overall credit score is strong and you’ve diligently paid your car notes in the past, your Auto Score is probably fine. However, if you’re nervous, you should also check this score before buying a new car.

Once you know your credit score, you’ll have a better idea of the interest rate you can expect on your car loan. If your credit score is strong (typically above 700), you’re likely to qualify for any dealer financing promotions. In many cases, the promotional rate is more attractive than what you’ll pay for a third-party auto loan.

On the other hand, if the dealer isn’t offering any financing incentives, you may want to research your bank or financial institution’s auto loan terms and see if you qualify. Having this information ahead of time will better prepare you to negotiate with the dealer and avoid overpaying for your new car.

Tip #5: Avoid Common Negotiation Pitfalls

When buying a car as a solo woman, the sad truth is that the dealer will try to take advantage of any knowledge gaps. For example, when negotiating price, they’ll likely ask you what you want your monthly payment to be.

Don’t share this number with them! Only negotiate the final price of the vehicle. You can also try to improve your financing terms, but only do this once you’re satisfied with the final price of the car.

It’s fine—and even advisable—to determine what your budget is ahead of time. However, sharing this number with the dealer allows them to manipulate the other terms of the transaction in their favor while still meeting the upper end of your monthly budget. For instance, they may quote you a higher price but stretch your loan term out six or seven years to lower the monthly payment.

Alternatively, they may try to push you into a lease by offering you a lower monthly payment. And while in some cases a lease may make sense for your budget and lifestyle, you should only lease a car if this is your intention. Otherwise, you’re locking yourself into a contract and have no asset to sell if your plans or financial circumstances change.

Secondly, the dealer will likely try to sell you gap insurance and a pre-paid maintenance plan. You don’t need to buy either of these, no matter what they tell you!

Instead, check with your insurance company to see if your auto insurance includes gap coverage. If not, you can likely add it at a very low cost.

Additionally, a pre-paid maintenance plan may make sense in certain cases. But trying to do the math on the spot is nearly impossible. Bottom line: don’t let the dealer pressure you into something you’re not sure about.

Tip #6: Be Ready to Walk Away When Buying a New Car as a Solo Woman

Of course, the first rule of any negotiation is to be ready to walk away. If you’re not completely happy with the terms of the transaction or the vehicle, don’t sign the papers. In many cases, taking a break from the negotiation gives you more leverage to ask for what you really want. It also gives you more time to research your options in the meantime.

Buying a car as a solo woman can be a stressful and frustrating experience. Yet the more information you arm yourself with ahead of time, the more empowered you’ll be to buy it on your terms.

Curtis Financial Planning specializes in helping independent women thrive today and plan for tomorrow. If we can help you take control of your personal finances, please get in touch.

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Women: Take Control of Your Financial Future

Take Control of Your Financial Future

Recently, Business and Tech asked me to participate in a panel of experts for an article called “Taking Control of Your Financial Future.” Below are some of the key points I shared during our discussion, which focus on the specific personal finance issues women often face.

I think all women can benefit from working with a trusted financial advisor if they need help managing their personal finances. A fiduciary financial partner can help you set financial goals, allocate and invest your money, and develop strategies to grow and preserve your wealth. However, there are certain things all women can do to take control of your financial future, whether you choose to work with an advisor or not.

#1: Take Ownership of Your Finances

My first piece of advice for women is to take ownership of your finances. Don’t depend on a relative, significant other, or spouse to make financial decisions on your behalf. 

If you’re married, consider taking a team approach to managing the household finances. Ultimately, being looped into these key financial decisions will give you peace of mind, especially if you lose your spouse.

#2: Seek Feedback from Other Women

Another way to take control of your financial future is to talk to other women about how they handle their money. Find trusted friends or create a money circle to talk about money issues and financial topics. Or there are money coaches that you can hire to work through your money issues.

#3: Be Your Own Advocate

Women need to be our own advocates. Despite the progress we’ve made, we still earn less than men, on average. In addition, we often must choose between being a caretaker and pursuing a career. These factors can significantly impact your ability to retire on your own terms, especially if you’re the primary earner in your household.

To ensure your compensation is fair, ask for more benefits or a pay raise when you feel you’ve earned it. Keep a record of your contributions and any metrics that demonstrate the value of your work.

And most importantly, don’t be afraid to negotiate your salary and benefits when accepting a new job. In many cases, negotiating your starting salary is your best opportunity to meaningfully increase your income.

#4: Find the Right Balance

If you have a family, juggling your home life and work life can feel like a never-ending challenge. To ensure your financial future doesn’t suffer as a result, you need to find a healthy balance.

First and foremost, seek out employers who have family-friendly employee benefits. Look for organizations that have good gender diversity among management and employees. These types of employers typically offer work-from-home, tele-commuting, family leave benefits, and even daycare. In some cases, they may even offer part-time work to support working parents.

In addition, talk to your spouse or partner about sharing childcare and household duties. Set up systems and schedules so each person knows their role to keep things working smoothly. If possible, ask local family members if they are willing to help.

It’s often helpful to set strict boundaries for your time at work and set expectations accordingly. Let your employers know it’s important for you to attend certain family events, which will keep you from working overtime. And be sure to stick to these boundaries yourself, even if you’d love to work just one more hour on that project.

#5: Invest in Your Future

Lastly, educate yourself about investing and be willing to invest to secure your financial future. Keeping cash in a bank will not beat inflation over the long run but buying stocks will. You don’t have to invest beyond your comfort level. However, it’s critical to find the right mix of investments to stay on track towards your financial goals.

For more personal finance tips, you can read the full Business and Tech article here.

Curtis Financial Planning specializes in the unique financial planning needs of independent women and women who take the lead in their household finances. If we can help you develop a plan to take control of your financial future, please schedule a call.

In the meantime, check out our personal finance resources, including The Happiness Spreadsheet, a fresh, inspiring approach to budgeting for women.

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S3 E3: Learning to Think Like a Breadwinner with Jennifer Barrett

Learning to Think Like a Breadwinner with Jennifer Barrett

Jennifer Barrett Will Teach You How to Think Like a Breadwinner

With April being National Financial Literacy Month, my conversation with today’s guest is even more meaningful and relevant. Jennifer Barrett is an award-winning financial journalist and digital strategist with more than 15 years of experience in print and digital media and a passion for personal finance. She’s currently Chief Education Officer at Acorns, a growing financial wellness startup with more than 9 million subscribers. In addition, she’s the author of Think Like a Breadwinner, a wealth-building manifesto for women, which is available for purchase everywhere books are sold on April 6.

In this episode we focus on some of the most important concepts Jennifer writes about in Think Like a Breadwinner, including:

  • The financial literacy gap in this country and its impact on women, specifically.
  • The importance of dispelling the myths that prevent many women from making good decisions with their money.
  • And the one mindset shift that will not only give women a more active role in creating their own future but can also create a positive ripple effect on every aspect of your life.

I think Jennifer’s message is so important, and I encourage all of you to read her book as soon as it’s available. I promise it will change the way you think.

Tweetable Quote

Nichole Proffitt on meditation:

Episode Highlights

  • [05:00] Jennifer and I discuss the financial literacy gap in this country and the long-term implications for women.
  • [09:17] I ask Jennifer to expand on some of the more surprising research from her book that underscores women’s general financial unpreparedness.
  • [11:41] Jennifer shares her personal story and the moment she knew she had to start to think like a breadwinner.
  • [17:47] We discuss how our experiences in childhood and the way our parents talked to us about money affects our relationship with money into adulthood.
  • [21:10] I ask Jennifer to talk about why investing is a must for women and to dispel some of the common myths that keep women out of the market.
  • [30:05] Jennifer describes the activism work she’s involved in to push for policies that better support women and allow them to step into the breadwinner role in their families more easily.
  • [39:32] We wrap up the episode by discussing how a breadwinner mindset among more women is beneficial for everyone.

Links Relevant to this Episode

JenniferBarrett.com

Think Like a Breadwinner by Jennifer Barrett on Amazon

Acorns

The Happiness Spreadsheet by Cathy Curtis

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S3 E3 Transcript: Learning to Think Like a Breadwinner

Welcome to the Financial Finesse podcast, where we’ll be discussing tips on how to handle your money and life with skill and style. Your host, Cathy Curtis CSP has been helping make finance accessible and intriguing for women for almost 20 years. You will get savvy actionable ideas, listening to her conversations with some of the coolest and smartest women on the planet. And now, here’s your host, Cathy Curtis.

00:50 Cathy: Hi, I’m Cathy Curtis, host of the Financial Finesse podcast and founder of Curtis Financial Planning, an independent financial planning firm that specializes in the unique financial needs of women. As a CERTIFIED FINANCIAL PLANNER™, I partner with women who take the lead in their household finances, and I help them secure their futures while getting more enjoyment from their money today. So whether you’re single, the primary earner in your family, or simply take an interest in personal financial management, this podcast is for you. 

With April being National Financial Literacy Month, my conversation with today’s guest is even more meaningful and relevant. Jennifer Barrett is an award-winning financial journalist and digital strategist with more than 15 years of experience in print and digital media and a passion for personal finance. She is currently Chief Education Officer at Acorns, a growing financial wellness startup with more than 9 million subscribers. 

But more importantly to today’s podcast, she’s the author of a new book called Think Like a Breadwinner: A Wealth-Building Manifesto for Women Who Want to Earn More (and Worry Less). This book is available starting April 6, anywhere books are sold. 

In this episode, we focus on some of the most important concepts Jennifer writes about in Think Like a Breadwinner, including the financial literacy gap in this country and its impact on women, specifically; the importance of dispelling the myths that prevent many women from making good decisions with their money; and the one mindset shift that will not only give women a more active role in creating their own future, but can also create a positive ripple effect on every aspect of your life. 

I think Jennifer’s message is so important, and I encourage all of you to read her book as soon as it’s available. I promise it will change the way you think. With that, I hope you enjoy my conversation with Jennifer Barrett as much as I did. And be sure to check the show notes at curtisfinancialplanning.com for more personal finance resources.

03:02 Cathy: Jen, it’s so good to see you. I think it’s been, I don’t know, eight years. I’m reading your book. And I think I knew you back when you were in financial journalism at CNBC here. And that would have been six, seven years ago. And then you’ve changed jobs. And about your book, Think Like a Breadwinner, I love that you weaved in your own personal story and that you are so vulnerable about the things that you’ve experienced in your journey to be a breadwinner and feel power around your money. 

Jennifer: Yes. Yeah, it’s definitely been…there was a learning curve there.

03:54 Cathy: Was it hard to do that? Did you think twice about doing it that way? To be that vulnerable? 

04:04 Jennifer: Yeah. A little bit, but I think, I didn’t want it to be a preachy kind of book or the kind of book where it sounds like I’ve got it all figured out, and I’m going to tell you how to do it. It I really wanted it to be more authentic in the sense that I’m not just an expert, I’ve lived it. So, I can speak from both perspectives. And I just thought it was important because so many of us feel so uncomfortable talking about money. And a lot of women feel such a lack of confidence around managing their money, you know this. 

So I just think it’s important for us to admit that we don’t know everything, too. And we’re learning, too. And, you know, we’re all kind of part of the same journey and hopefully the destination. To get control of our finances and feel really good about where we are financially. 

05:00 Cathy: So, yes, I agree with you being relatable. And women don’t want to feel bad when, you know, they don’t want to read a book and go oh, my god, I’m terrible. I’m not doing anything right. 

Because money is so complicated. I mean, when you think about all the little acronyms you need to know, and all the tax laws that have “if yes, then do this, if no, but if that happens, do that.” And learning about all the different retirement plans, it’s a lot. So nobody needs to feel bad because they don’t know it. 

Although I think it could be better in our country, if we had more financial literacy classes, like you hear that a lot. And it never seems to happen. 

Jennifer: Oh, I completely agree. And we still have not made a lot of progress there. And I think there’s so many people who care passionately about that, and really are trying to get that implemented in school curriculums, and I have a feeling the pandemic may have put some of those efforts on hold. 

But I don’t know, either. Everyone seems to be in agreement that this is a life skill that we all need to learn. And yet I think it’s only 17 states that have it as a requirement in their high school curriculum. So yeah, there’s a gap for, you know, there’s a financial literacy gap, period. It’s not just a matter of whether you’re a woman or a man. 

But we do know, I mean, there’s research that shows that parents actually do speak to their sons differently than they do to their daughters about money. And so I think that plays into it, to where they are more apt to talk to their sons about investing and building credit. And they are more apt to talk to their daughters about saving and spending smartly. 

Cathy: And this all goes back to budgeting. 

Jennifer: Yes. And it all kind of goes back to this. You know, this old conventional model where the man was the breadwinner, the woman was the caregiver, took care of the house, you know. So being able to budget and clip coupons and count your pennies was really important if you were in that role. But those skills don’t translate as well anymore, because now women are moving into the breadwinning role. And regardless, we need the skills to build our own wealth. 

And so, there’s a lot of work to be done there, I thin—in terms of the messaging, and not just the financial literacy piece of it. 

Cathy: Yeah, that’s still stuck in the 50s. A woman at home with the apron, but managing the budget, getting an allowance. My mom was right there. She got her little allowance, and she managed it really well. You know, but my dad handled all the finances. 

But why are we still stuck in the 50s? How many years ago was that now? Really?

Jennifer: The conventional breadwinning model rose to prominence in the 50s and 60s. So it’s been like 70 years, and we’re seeing a paradigm shift in the model itself. But our attitudes have not caught up to that. Our culture has not caught up to that. Our corporate policies have not caught up to that. And so, you know, we have some ground to cover, I think, there. And it really just starts with the way that we talk to women and the way that we message them around money. 

And so, I’m not surprised at all that a lot of women actually don’t think that they need to have these skills. They think that, you know, they’re going to get married, and the man will take care of a lot of this stuff. 

08:10 Jennifer: You know this, right, because a lot of women are also really wary of investing, certainly investing in the stock market. And that is probably one of the best places to put your money in order for it to grow. And so if you are already wary of doing that, you think it may be too risky, too complex, whatever the reason is, so you put off doing that. And on top of that, you’re sort of thinking, “alright, I’ll get married, and my husband will probably be the one to manage the finances anyway.” 

Cathy: That could be an unconscious thought, too. So I want to read you a few things about how women are different from men that, as I’m reading your book, I picked them out. And women listening, I don’t mean this to be depressing. But research backs up every single one of these things, and Jennifer, you did a great job pulling in all this research out there. It’s so appreciated. I’m going to use it as a reference guide, I know it. 

09:17 Cathy: Women…

Earn 20% less than men for the same jobs in nearly every single occupation
Have lower levels of financial literacy
Higher credit card debt
Less likely to ask for a raise or promotion
Lower average credit scores
More afraid to say no to projects at work
Concentrated in the lowest paying master’s fields
Career tracks are usually things like human resources
Have less money saved at retirement: one in five women have nothing saved for retirement.
40% more likely to live in poverty in old age
Carry more student loan debt
Not invest, leave money in cash

A lot of women are more likely to tap into retirement accounts early, even though there’s penalties and tax. 

Jennifer: And I did that, like in my 20s. 

Cathy: Are less likely to take any finance classes in school. And I didn’t even write down the stats in the caretaker chapter about how many women take the caretaker role and leave work for children or older parents and therefore get retirement savings interrupted and all that. So I couldn’t help it. I read the book, and I was framing it. And I thought, there’s a lot of not good stats about women and wealth in this country. I don’t know what it’s like everywhere else. 

Jennifer: It’s not all that much better. I think Nordic countries have it a little better. They have more egalitarian policies that have held. 

Cathy: Yes, like childcare and all that. So anyway, as I’m thinking about this—I’ve been a financial advisor for almost 20 years. And I work mainly with women, and I work with a lot of single women. So I see many of these things happening. And I just keep asking my question over and over. When are these statistics going to start turning? 

And yeah, writing a book like you did with, you don’t only have the stats, you’ve got action steps in almost every area. That’s really important. So anyway, I want you to be able to talk. Talk to me more about, I know your personal story inspired you. But let’s talk a little bit more about that. 

11:41 Jennifer: Sure, well, I had my own wake up call. And that was really the genesis of the book. I was in my early 30s, I was an editor at a national news magazine, and I had a great job. You know, from the outside, it looked like I had it all together. 

But I was sharing a one-bedroom apartment with my husband and our toddler at the time. And I remember one night, when he woke up, I was kind of pacing back and forth in our bedroom trying to get him back to sleep. And I just had this moment where I looked around and I thought, we are in a completely unsustainable situation. And I don’t have the means to help us get out of it. 

And it was such a crushing moment. I mean, honestly, when I still think about it, I’m like, because I had thought I’m such an independent woman. I have a 401k, I have a little bit in a savings account. I’m paying half the bills. You know, I had credit card debt, but I was paying it down. And I thought I was sort of doing everything right. And it was in that moment that I realized I had missed a huge piece of the puzzle, which was, I was not investing for the midterm. I did not have the kind of savings that would help us buy our own place. I didn’t even have enough set aside to help us really afford to have a second child, which I badly, badly wanted. We both did. And here we were in a situation where we were about to outgrow our apartment, and I wasn’t even sure we could afford to rent a bigger place. 

Cathy: Let me stop you right there. Because what it sounds to me like, is that you realized that you had these super important goals. Having a second child and having your own place to live, which are pretty important things to me, really were at stake. And somehow those goals became paramount. So your epiphany was, oh my God, I’m not going to ever have this unless something changes. 

13:38 Jennifer: Yes. And to be fair, my husband, when we first met, his income far exceeded mine. He worked at a startup; the startup went under and he went back into journalism. So our incomes were much closer together.

And so, you know, he was contributing as well. But it did occur to me that neither of us were really prepared to buy this house. And there was no way that I could slough that off on him or assume that he would be the one to do this. What I really realized was, I had left myself in an incredibly vulnerable position, where the things that were most important to me, were now at stake because I had not taken a proactive approach to my finances to make sure that they came to pass. And that was just a huge wake up call for me. 

And then the next question was, why in the heck did I make these money choices? Like why would I ever have made money choices that leave me in this position? And as I started to really think about it, the turning point question was, I asked myself if I had been raised to think like a breadwinner. Like so many of the guys that I had dated in my 20s, who were all about, like I need to buy a house, I need to save money so I can get married, and all these things. I thought if I had been raised to think like a breadwinner, how would that change the choices I made with my money and even my career? And that was literally the turning point because I realized I hadn’t been thinking that way at all. 

15:00 Cathy: And also, you mentioned that you realized you were getting resentful towards your husband, that he wasn’t taking on the traditional bread winner role. And you realized that there’s two of you, it’s your goal too, and you decided to take the reins. I couldn’t help but thinking too when I was reading the book, that “think like a breadwinner” could be replaced by “think like a man.” And then I thought, no, that’s not it. It’s: think about how men have been raised in our culture and in our institutions and the things that they have been taught, versus the things that women were raised to think about and prioritize. 

Jennifer: Yeah. 100%. A man sort of grows up thinking, what do I want in my life? And how am I going to get it? And we may think that way about our career, but I think we’re still not brought up to think that way about our life in general. About like, this is what I want my life to look like. How much money am I going to need to make to support this lifestyle? I know that’s a question that I didn’t ask. 

I certainly, I mean, I went into journalism, no idea how badly it paid. There’s lots of men in journalism, but it’s more, there are a lot of women in journalism, and you see more men in management in journalism than you see women. I mean, women tend to be more on the reporter side, the writers, the writer track. That’s shifting, obviously. Now, there are a lot more women in management. But certainly when I first got into journalism, there were definitely more men at the top of the masthead, and those are the jobs that pay well. Or they were on the business side. And those were the jobs that paid really well. I only learned that later, of course. 

16:56 Jennifer: I moved into management shortly after I had that epiphany. And that wasn’t the only reason why, but it was a big reason. I realized, you know, these things are so important to me that I don’t want to put them at risk. And I need to get a job that pays well. And initially, I thought, well, this will be a temporary situation. I’ll move into management, and then maybe I’ll go back to writing. But once I was in that role, and on that track, I found I really enjoyed it. I loved the challenges. I loved how it sort of stretched my idea of what my capabilities were. 

It was very interesting how it actually started to shift my mindset even more in terms of what I thought I was capable of and how I envisioned my career. So in a lot of ways, that was a big step as well. 

17:47 Cathy: I think that happens to a lot of women that step up. I mean, that’s true for me. I think if women could get into more of a wealth mindset mode, breadwinner mode, combined with their personal skills that they already have in spades, right? The good communication skills, the caretaker skills, all those things, they’re gonna be unstoppable.

This is a challenge. And going back to your mindset growing up was not that you were going to be this person to build the wealth. And I’m thinking back to my childhood, because I had a little different trajectory for some reason. Wealth has always been important to me. I can’t figure out why. I’m thinking about it now that I read your book. 

But I do remember one message from my father. He always told me, Cath, you could do anything you want. He always said that. That was one of the key messages from my father, you know, the dominant male figure my life. And I’m not sure how many women are told that when they’re young? So my answer could be that my upbringing created the groundwork for me. But I know that’s not typical. And in the things I just read, the statistics about women are showing that that is not typical. 

Jennifer: That’s true. I interviewed a number of women who did have a breadwinning mindset from the beginning. And I can think of one in particular where she told me her dad actually sat down with her, taught her how to invest. He invested in real estate. So he taught her how to invest in real estate. He told her what capital was, he told her that when you have anything outside of your paycheck, that’s capital, you don’t touch it, you invest it. You leave your investment alone until you need it. 

He taught her how to separate her money into different piles for savings, charity investing, you know. So very early on, she got these lessons from her dad. And she was the oldest of three girls, and part of me thinks that maybe he was imparting the lessons on her that he might have done with a son.

20:00 Jennifer: In other cases, I talked to women whose parents divorced and the mom had been quite reliant on the dad. And after the divorce, they saw the impact on their mom and consciously decided, I am never going to allow myself to be in a vulnerable position like that. It wasn’t that they disrespected their mom, there was nothing like that. It was more like, oh, my poor mom, she ends up in this situation because she stopped working, because she wasn’t involved in the finances. They saw that unfold in front of them and how painful it was for their mom. And so they consciously decided, I am not going to do that. I’m going to take care of myself, I’m going to have my own money. And so they made very different decisions. 

And I would say I mean, my parents, I grew up in a middle-class household. Both my parents were professors of accounting at one point, so yeah, I did great in math. It wasn’t like a lack of skills. I knew about the stock market. But there was a disconnect for me between sort of knowing the stock market existed and realizing what an incredibly powerful tool it was, and building wealth from the get go and how important that was. 

21:10 Cathy: Yeah. Let’s talk about that. Because that’s a really key thing for women to understand. Because I still see women who are really afraid of investing and who keep way too much money in low interest-bearing bank accounts. And you have some stats about that in the book that that’s a true phenomenon. And, so you talk about compounding and all that. I mean, the book is such a great resource. If a woman read that chapter on why investing your money is so important, even if you just simply put it in an S&P 500 fund and let it sit for years, if you just did something as simple as that, it will change everything. 

Jennifer: Yes, because there’s no comparison. We know that, on average, the S&P 500 Index rises about 7% per year, right, on average. Obviously, some years it goes down. But you take an average 7-7.5% return, which is what it is. And then you look at a savings account, which right now is paying .05% for a traditional savings account and only like 0.4 or 0.5% for a high yield savings account. 

So we’re talking about a difference of 6.5 to nearly 7%. There’s no comparison. And when you run the numbers, and you look out five or 10 years, you’re talking about the difference sometimes of tens or hundreds of thousands of dollars, depending on how much money you have. And that accounts for a lot of the difference between what men have saved and what women have saved a lot of times. 

I don’t know where that comes from. But I did interview a lot of women who say that they take comfort in knowing that the money is there and accessible at any time and, so there’s definitely something in there that’s more emotional and more psychological. 

23:02 Cathy: You know that’s a really good point. When I talk to women who have that fear, they don’t understand that investing is very liquid. There’s this myth. And this is a financial literacy piece. Some people think if you put money in an investment account, you can’t get it back easily. When I realized that myth exists, it makes it a lot easier to explain that no, it’s completely liquid. You might sell when the market’s down. But you know, you can get your money out whenever you want. And you write about a lot of the myths of investing in your book, which I think is really helpful, because they’re out there and they persist. 

Jennifer: They do. We still have this idea that it’s complex and risky. And to me, I mean, I tell people this—I think you may agree—is I think it’s more risky to leave your money in savings for too long, because you don’t give it the opportunity to grow. And so if you want, certainly put some in savings. Enough to cover, you know, we usually say three to six months of expenses. 

But if you’re not investing the rest, you are missing out on all this potential growth and putting yourself at a disadvantage. I mean, right now, savings accounts pay less than the rate of inflation. So your money is actually losing value sitting in a savings account. And that’s, it’s really hard to wrap your head around that. And I get it, and I say if you’re nervous about the stock market being down, then invest in bonds or bond funds, but really almost anything has a better return than savings accounts right now. 

Cathy: Well, you know, and maybe the other thing too is, we’re talking about the now and investing now. The reason you invest is for when you can’t earn a paycheck anymore. And in this country, we don’t have as many safety nets anymore, right? The companies don’t have pensions. You know, what’s that old saying? A man is not a retirement plan? 

25:06 Cathy: Your dad is not gonna be around anymore. And so you have to think about it. And then for some women, younger women, that may seem way, way far in the future. But it takes years of compounding to get quite a chunk of money that you need to live out that—who knows how long it’s going to be, because we’re all living longer—30, 40, 50 years where you may be earning nothing or a fraction of what you’re earning in your prime working years. And so that’s that stuff that, unfortunately, women end up living in poverty. The bag lady syndrome is real still. I don’t know how many years it’s gonna take for all those trends to like, start reversing.

26:07 Jennifer: I’m determined in our lifetime. I mean, that’s my goal. I want to do everything in my power. I’m sure you do, too. I mean, to your point too, time is one of the most important factors in investing. So even if you’re investing $25 a month, if you’re 22, I mean, that money compounds. So it’s like, if you’re living paycheck to paycheck, or you perceive that you are and you think you can’t afford it, I would challenge anyone who says that to just put aside 5, 10, 15, $20 in investments. 

And the psychological, you know, just the benefit psychologically of seeing that money grow is so incredible. And then it serves as such an incentive to continue to do that. And you can actually see how people shift their habits. And we see this at Acorns where people sign up for roundups, and they’re usually at about 30 to $35 a month that they invest. So they sign up for just roundups, nothing else. And then they see that money start to grow. And we see after 3, 6, 9 months, they start putting more and more money in because they understand, you know, the power of compounding and the power of putting your money in. 

And also, they realize, you know, I don’t miss that. I don’t miss that spare change. I don’t miss that $35. So what’s another $5 here, or $10 there? And that is so beneficial to you to learn that lesson early on and then just start piling more money in as you can. It’s just huge to start early and have the advantage of time and compounding. And I know you know this too, but it’s like one of those things that drives me nuts when people feel like oh, no, no, I have to have a lot of money to invest. And I’m like, no, no, no, you won’t have a lot of money unless you invest. You’ve got it backwards.

27:43 Cathy: Okay, I have a story to tell you about Acorns. So I teach a personal finance class in the summer at a woman’s college here. And these are all college age and graduate level. And I’m teaching really basic personal finance, and they’re learning all new things. And one of the women told me, we were talking about savings apps and Acorns came up in the conversation—that she really likes using that app to save. 

And the other tool that I like talking about with women is Roth IRAs. You know, they fit the fear mentality perfectly for women because it’s a way to start getting invested because it’s a retirement account. So theoretically, you don’t touch it till retirement. But you can withdraw what you put in any time, without penalty and without tax, and you can invest it. And so I think it’s important to pick out things that are really easy to understand and explain the concepts and speak to those fears about not having access, or I’m going to lose it, or I’m never going to get it again. 

And the other financial literacy thing that drives me nuts is some people think an IRA is the investment. If you have an IRA, you have an investment. 

29:13 Jennifer: Yeah, you have to invest the money you put in. I actually had a conversation with someone not that long ago, where I had told her about the Roth and I was like, you should do this, you qualify. You know, like we checked her income because there is that income threshold. But then she said, oh, I had put all this money in my Roth. And I said, great, how did you invest it? And she said, I didn’t know I was supposed to invest it. It was just sitting in a money market fund. 

Because no one ever explains the second part of that. You’re like, I want to open a Roth IRA, and Fidelity or whoever says—or, you know, Acorns, we do it but we invest it for you, so we’re a little different—but in most brokerages, you open it up and they’re like okay, we’ve opened your account. And they send you on your way. And they don’t tell you, you have to invest it yourself. 

30:05 Cathy: Like the 401k. Now, there’s a default, it has to be invested. Right? It’s almost like that should happen with Roths. 

Well, let me let me ask you something. So your message is so strong in this book and so helpful. What is your plan to get the word out and the book out to as many people as possible? Are you gonna, you can’t be on the road right now, right? 

Jennifer: Okay, this my little studio, my makeshift studio. We actually just did the audio book, and I had to create a studio in our closet, which was funny.

30:42 Cathy: So you read the whole book? How was that? I’ve always been curious about that. Was it fun? Was it a drag?

Jennifer: It was fun. I mean, I’m an editor at heart. So there were parts where I thought, oh, I could have streamlined that. Or, you know, it’s hard to turn that part of you off. But it was a much more intimate, you have a much more intimate relationship with the book, when you’re reading it. And it’s like you’re talking to someone, you know, as you’re reading it. So that was a really incredible experience, because I was on with a producer and with an audio engineer, and they kept saying, you know, just imagine you’re talking to someone, you know, you’re telling them this. And so then you really kind of get into it, and you’re absorbed in the material. 

Cathy: Oh, that’s fascinating. I think this would be a great book to listen to on Audible. But I also think it’d be a great workbook where you actually write. You know, somebody that’s learning about finance actually buys a book and writes notes in it. I mean, I’m gonna buy it for me, because I want to use it as a reference guide. 

Jennifer: Yes, write in it. I encourage you to. 

31:58 Cathy: Your point about reading and editing—that’s why it’s so important. Anything you write, you read it out loud, right? 

Jennifer: So yeah, also, there were a number of things that I actually didn’t know how to pronounce. So many names. But no, it was a great experience. And so I’m doing that, I’m doing podcasts. And I mean, I’m trying to get the word out as much as I can. 

And I’ve joined some initiatives with some other women primarily, and some men who are in the space of really trying to advocate for paid leave and some of these policies that will help women better. So that’s a part of it, too. And I’m going in and speaking to companies about this, speaking to women’s employee resource groups, about this kind of stuff. 

You know, I was passionate about this before I wrote the book, but I hope that this book gives me the opportunity or the excuse to talk about it even more, though.

Cathy: It will. You have a platform now, which I’m so grateful to you for taking the time to write this because really, it’s like a manual to start growing wealth. It replaces like, I remember, there was this really thick book written. Now I’m not gonna remember the name. But I mean, it was, you know, a bomb of a book. And your book is still quite a long book. But it’s organized in such a way. And the storytelling in it about your life, and about other women and their money journeys, makes it an interesting read, which is not easy to say for a lot of finance books.

33:38 Jennifer: Thank you, I appreciate that. I did try to weave in as many stories as I could. And also the mindset piece, I think makes it more interesting, because it’s a message that a lot of people haven’t heard before. 

And just to go back to what you’d mentioned at the beginning about people being kind of embarrassed about money or not comfortable talking about it, I think we do a lot of money shaming. And so one of the things I really wanted to do with the book was to not make anyone feel ashamed of the money choices they’ve made. And help women understand that so much of it comes from the cultural conditioning that we’ve gotten, and the messaging that we got as kids. And so even if we know what we’re supposed to do, those, you know, this kind of conditioning can get in the way of that, and in a really subconscious way. 

It’s really hard to see that sometimes, you know, to understand like, why am I making these money choices, and not those money choices? A lot of us don’t stop and question that. And if we did, you know, it might take some digging to realize, oh, I put my money in savings because I’m terrified I’m going to lose it. Because maybe their parents had, you know, maybe their parents lost money or they had some experience, they were exposed to something, and so that has lodged in their brain. And so they’re afraid of investing themselves. 

So many of us carry around these stories, whether you’re a man or a woman, and it’s so important to examine those, especially if they kind of get in the way of your wealth building efforts. And it’s hard to do that on your own. 

35:00 Jennifer: I think you probably have tons of stories of people you’ve talked to because that’s part of what you do, right, is unpacking that. 

Cathy: You know, I really read your chapter on values and goals with great interest because I actually have an e-book called The Happiness Spreadsheet. And I have an exercise almost exactly like yours, where I list the 100 values. And I’m trying to get people to really think about what they want in their life. So I can so much relate to that. 

I laughed, though, because I was thinking about my book. It kind of is a budgeting book. That made me think it’s not an investing book. But one of the values is growing wealth. And I do interweave that in there a little bit. But I laughed at myself when I read that. But so I think that’s the core work for women. It’s worth figuring out where you got your money mindset from, and then doing the work to let go of that stuff. And realize who you are now. 

So many of our values could be from our parents. I mean, I even think about why I went into business, because I did the exercises in my own book. So I think I went into business because I love, my dad was on a pedestal, he was a businessman. And I turned it into a success. But as I was doing my exercises, I thought, would I have chosen a business career if it wasn’t for my dad? 

Because I love creativity. And you can make this work creative in certain ways. And that’s what you do. You compensate, once you get somewhere, because your point in the book, too, was choosing a career that can make you a living. 

36:56 Jennifer: Yes. Right. Yes, that piece is often missing in the advice that we give to women. And I love the idea of you can be anything you want. But a lot of times, and there is actual data around this, is that girls are less likely to have conversations about how they’ll be compensated in the careers that they’re interested in than boys are. 

So I mean, it all comes back to the same thing. We are still not thinking of women as breadwinners. We are still not setting up women to succeed in that role. Even though more women are moving into that role than ever before. More than 40% of moms in the country right now are the main or sole breadwinners for their families. 

So it’s happening. Whether or not they’re prepared, women are moving into those roles for a variety of reasons. We are still not preparing them for that role. And we’re not thinking about women being in that role or about their income being so critical with the policies that we have and the perceptions and biases that get carried into the workplace. And so you see that sort of play out in all these ways. 

38:00 Cathy: In your opinion, do you think that, given there’s a new administration, that there’ll be more focus on family policies that help women breadwinners? 

Jennifer: That’s the hope. Yes. We’re advocating pretty hard for that. And I do think, I mean, Biden did push for paid leave in the stimulus bill, and it didn’t end up in the bill in the form that he had proposed, which was kind of a mandatory leave. Now it’s an incentivized leave around with tax credits. And it’s really tied to the Coronavirus, not the kind of blanket paid leave that that we’re really advocating for. But I think he’s open to it. He said he’s open to it. You’ve got a lot of senior lawmakers right now talking about it. So I’m hopeful. 

Cathy: We’re the only country in the world that doesn’t have it—the only industrialized country in the world. 

Jennifer: Yeah, the only industrialized one. It’s so fascinating to me, because I studied Norway, and we’re where Norway was in the 1970s. So they implemented these policies in the 70s and men didn’t take paternity leave. So 20 years later, they completely revamped those policies and made it mandatory for men to take a certain amount of paternity leave. Or it was sort of a use it all or lose it policy. 

And they started this whole public awareness campaign to try and shift the perception of men as caregivers. And now they have one of the highest participation rates in the world for fathers and mothers. I mean, it has completely changed the game. And we would be smart to learn from their experience. But we’re still having the conversations they were having in the 1970s.

39:32 Cathy: Because we have a patriarchal society. It needs to shift.

Jennifer: It really needs to shift. And it’s good for men too. I mean, there’s so much research around the importance of men having that time to bond with their kids. Being able to be caregivers without feeling stigma or anything like that. It’s really, this is not just about women. 

40:00 Cathy: No, I know a lot of my peers in the financial world are men with young children. And one of the things I hear the most is how happy they were during COVID. Because they had to be at home, they got to see their kids and bond with their kids more. You know that must be so awful, to feel like you have to leave the house every day early in the morning, and you don’t get home till late. And you miss out on so many things that happen with your children. Good family policies are good for everybody, not just women.

40:37 Jennifer: I’ve seen it play out with my husband, because as I moved into the breadwinning role, I took jobs that had me traveling and were a little more demanding. He started working from home, and he was able to spend more time with them. And I saw how he bonded with our two sons. And I just thought, I don’t know. I was so grateful that he has that relationship with them. 

And I had this moment, this one phone call where I called my dad, I mentioned in the book where I was really stressed out, I was working really long hours in this one job. And I felt like I wasn’t getting a lot of time with the kids. And I was describing it to him. And he said to me, now you know how I felt. And I just burst into tears. It was the first time I really realized what a sacrifice he had made, certainly in his own mind that he thought would benefit us, and that we’d appreciate down the road. But he really was not around very much when we were kids. 

And you think like, I’m so close to him now. But I didn’t really get a chance to build that relationship until I was already in college and then spending like long amounts of time with him. And I just think, gosh, what he missed out on, you know, as a younger dad. 

Cathy: And what the kids miss out on not being able to get close to their dad. You cannot do that in two quick days, you know, a weekend. It takes more time than, you know, a week vacation in the summer. So all of the things we’re talking about are really good for everybody. The whole family system. So I love that. I mean, I could cry thinking about how little time I got to spend with my dad. And that creates its own set of issues where you miss somebody all the time. It’s just not, it’s not a good thing. 

42:32 Jennifer: No, and I think about, we have the opportunity now to change. That is really what it comes down to. I see how my kids are with my husband. And we’ll flip flop. I mean, I will not always be the main earner. Probably, who knows. I mean, it’s fine if I am. But I mean, just because you move into the main earner role doesn’t mean you’re there for life. 

And certainly, during the pandemic, we’ve shifted back to almost a 50/50 caregiving model, which has been wonderful. So I know what your colleagues are talking about. But I had plenty of time with them too. I feel like each of us are really getting the opportunity to bond with our kids and spend a lot of time with them. And that they really know each of us well and know that we’re accessible to them. And that’s so important. 

And watching that in contrast to how it was when I was growing up. Or even my husband and his dad. His dad was a pilot. He was never around. So I feel like we just have a tremendous opportunity here to ship that for the next generation. 

Cathy: I do too. You know, it could be so great if it was a partnership, not this, you know, the woman is the breadwinner in a marriage but also has to do all the housework. 

Jennifer: Yes. Which is what’s happening now if you look at the stats. It was happening throughout the pandemic too. And even when women earn more, as you said, they’re still doing more of the housework, the childcare. 

And it’s not all the men. I will say I will say this, that part of it is yes, the partner needs to step up as well. But I can speak from my own experience that letting go of the caregiving piece of it, even like letting go of the idea of yourself being you know, being the main caregiver. For me, my identity was so intertwined with that as a mother. I felt so deeply like that was my responsibility, that actually letting go of being the primary caregiver there for a few years was tremendously hard. 

Cathy: Really hard. And I get it in a lot of women to feel that way. I know that they want that role. And you know, there’s nothing wrong with being a caregiver. 

Jennifer: No, I mean, I think the whole problem is we aren’t valuing caregiving enough in this country. Right? And we and we pin it all on one gender, which doesn’t, you know, it’s a disservice to everybody. 

44:53 Cathy: I think it is too. You know, in my own experience, I switched careers and started from scratch. My husband was a breadwinner in those years. I built up my career, he wanted to retire because he’s older than me. I said, fine. Now I’m the breadwinner. It works so well, it’s great. Everybody gets what they want, and it creates a more loving relationship, more trusting, and it sounds like you navigated your own situation really well. And I’m sure it wasn’t easy at times. And you’re very open about it too. Because I know your husband’s read your book. So he’s fine with having a more equal paradigm in the marriage?

45:32 Jennifer: Yeah, I had him read the book proposal before I ever submitted it, because I wanted to make sure he was okay with it. And my whole point for him, too, is that this was not in any way meant to make him feel bad about not earning more. That’s not even what the book is about, at all. 

Cathy: No, it’s really about portraying a marriage that was working towards more equality so that you can both reach your goals. And give up on the princess mindset.

46:07 Jennifer: I didn’t even think of it as that. But it’s true, deep down. I don’t think I would have admitted it. But deep down, I think I was just assuming that. And he learned to embrace a childcare role, which I love. 

Cathy: I love this, what we’re talking about right now. This, it really came out in the book. So I don’t want to make this too long, or we’re gonna lose our listeners. I could talk to you all day about these things. So let me ask you this. So tell me about your role at Acorns. And also give info on how people can access your book. And any other, if you have a blog, or those kinds of things. 

Jennifer: You can go to jenniferbarrett.com. There’s a lot of information on the book there. There’s a form you can fill out if you have questions. I do coaching too. I’m just getting my performance and leadership coaching certification. So I started coaching primarily female startup founders and senior leaders. So I do some of that as well.

Cathy: I want to hear more about that. Let’s just talk about that for a couple of minutes.

Jennifer: Sure. I mean, I’ve always been interested in coaching, and I took an intensive last year. And then as I pulled back on my hours to work on the book, of course, I have to immediately fill them with something else. So I signed up, I applied for this. It’s Brown and ACT. It’s a joint program. And it’s really focused on performance and leadership coaching, grounded in neuroscience. I thought it was a really fantastic program. And I’ve just finished all the requirements for that. 

I actually thought even if I didn’t end up coaching, it was really fascinating to do that work as I was going back and kind of looking at the book, because so much of what I talked about was mindset. So I was really fascinated to see, how do you really help to shift somebody’s mindset? You know, first you have to make them aware that they even are holding this mindset that may not be benefiting them. But then how do you actually shift it? So that work was fascinating. And I figured there’s no downside to having that. 

Cathy: I love that, how much work is being done in brain science right now. That’s fascinating. 

Jennifer: Well, so often it comes down to that, right? Because we sort of know what to do. But then why aren’t we doing it? I mean, with our health, with our money. So it’s not necessarily a lack of information. Sometimes it’s the lack of knowing where to go for the right information. But so often, it’s a behavioral issue. It’s there’s some blocker, some mental blocker that is keeping us from taking the steps we know we need to take. And so I thought it was really important for me to dig into that. 

Cathy: You’re gonna write another book. I know that. You’re gonna solve the problem of how to get the breadwinner mindset.

48:59 Jennifer: I sure hope so. I don’t know that it’ll be fixed that quickly. It may be years in the making. But yeah, I would love to see that if more women start thinking that way. 

Cathy: Okay, great. And then your book is on all the platforms, I saw. It’s not available quite yet, right? 

Jennifer: April 6, but you can preorder it on Amazon. And I mean, on any bookseller, really. Barnes and Noble, my publishers Penguin Random House, there’s a page there too you can preorder from. So if you want it, you can preorder it now. 

Cathy: Excellent. Well, I can’t wait to delve into the book even more. It’s a wonderful, wonderful book. And thank you so much for writing it and for being on my podcast. 

Jennifer: I’m thrilled to be here. 

Cathy: So great to see you. 

Jennifer: So great to see you too. Cathy.

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S3 E1 Transcript: What Every Woman Needs To Know About Long-Term Care Insurance

Welcome to the Financial Finesse Podcast, where we’ll be discussing tips on how to handle your money and life with skill and style. Your host, Cathy Curtis, CFP® has been helping make finance accessible and intriguing for women for almost 20 years. You’ll get savvy, actionable ideas, listening to her conversations with some of the coolest and smartest women on the planet. And now, here’s your host, Cathy Curtis.

00:53 Cathy Curtis:

Hi, I’m Cathy Curtis, host of the Financial Finesse Podcast, and also founder of Curtis Financial Planning, a financial advisory firm that partners with women to manage their financial lives.

Today, I’m looking forward to talking with one of my favorite people in the industry, Liz Eshleman, who is an independent long-term care specialist. Not only does she know her stuff when it comes to long-term care insurance, she’s also a delightful upbeat personality.

Maybe that comes partially from her background as a singer and performer. She spent 16 years at Mills College in Oakland, teaching music theory and and teaching voice education. And she even started an advanced vocal ensemble program at Mills. She’s been an educator for 30 years, which really helps her in educating people about long-term care, which can be very complicated.

So how Liz and I work together, I’m a financial planner. And I work with my clients to build comprehensive financial plans. A very, very important aspect of financial planning is the fact that you’re going to live a long time, and that you need to save your money for your retirement years. And what happens when we get older, is we need more medical care. And a large percentage of us are going to need long-term care of some kind. In fact, about 70% of people will need some kind of long-term care.

And that is what I call a risk in a plan. Do you have enough money saved to handle that long-term care issue and cost. So that’s why I partner with long-term care specialists like Liz when I see a need with my clients that they might need to have that extra long-term care insurance policy to help them out. So Liz and I are partners in that. And I trust her completely to take care of my clients and educate them about only what they need. She never sells more than someone needs. And she is a really great consultant.

So then on long-term care, I want to add one more thing. It’s sort of a women’s issue, because as we all know, women live longer than men. 64% of Americans with Alzheimer’s are women. And the statistics of the number of women in nursing homes are also huge. 68% of people in long stay and nursing facilities are women. And in addition, women end up being the caretakers if their husband needs long-term care. So this ends up being a really big issue for women.

So I’d like to get into the weeds with you, we’re gonna try and keep it as easy to understand as possible, because long-term care can be complicated. And one issue that always comes up is the issue of eligibility for the insurance. And that’s why I want to start with that. There’s nothing more disappointing than somebody decides that they want to buy a long-term care policy, they’re willing to learn about it and make the commitment to buy. They talk to an agent and they find out they aren’t eligible for whatever reason, like medications they take for a condition they have had.

And Liz is really expert in how these insurance companies view people and their medical conditions. And the first step is she has a conversation with you to screen and figure out whether you will be eligible and if not, how she can counsel and coach you to become eligible. So I’m going to start talking and I’m going to let Liz take over on this eligibility issue.

04:57 Liz Eshleman:

Great. Thanks, Cathy. And thanks very much for having me today, it’s a pleasure always to work with you, and happy to help your clients in any way I can. This issue of eligibility is thorny, because people don’t realize that, in fact, some of my most healthy clients overall, for instance, my athletes, clients who are runners or skiers, even swimmers, if they have an issue, for instance, a chronic tennis elbow or a bad shoulder from swimming, or, you know, any kind of what’s construed as a mobility issue, they’re not insurable. So I’ve got really healthy clients, who for a time, if it’s not chronic and ongoing, can’t get coverage.

Now, what do I mean by chronic and ongoing? Well, just what it sounds like, if it’s a short-term issue, they’re in physical therapy for three months or six months, I’ll be able to help them after they’re done with their physical therapy. But there’s a waiting period. And if the problem doesn’t go away, which is often the case with a back problem, you know, or a knee problem. I mean, and if surgery is indicated, forget it. They’re not going to be able to get this coverage, perhaps at all.

06:21 Cathy Curtis:

Let’s say someone has a knee injury from a ski accident. And it keeps bothering them, it and they they’ve gotten an X rayed and MRI. And it’s not something that can be operated on, but they need to do PT, so they get referred to the PT person, and they start going and with that kind of thing be considered non eligible. And you would say, go through the physical therapy, come back to me in six months when you finished it. And then we could talk.

06:54 Liz Eshleman:

Yeah, and in fact, not just when you finish, but wait three months, because the company won’t cover you until they’ve seen that you’ve been off of physical therapy for at least three months. Every company’s underwriting guideline is a little different. But pretty much across the board, this issue of mobility is a concern, because they see that turning into the need for long-term care down the road.

07:15 Cathy Curtis:

Got it. Okay, talk about what conditions are absolutely not, cannot be covered by long-term care if you’ve got a condition like diabetes or…

07:29 Liz Eshleman:

Right. Diabetes is possibly insurable, depending on the agency really. So, you know, I won’t go into too much detail about exactly, but let me give you an overview of some. Of course, this past year with COVID, we’ve seen that become an issue for people. Now, a diagnosis of being positive for the COVID-19 virus has created a waiting period, that companies are insisting that the client has to wait. And it’s different with every company again. But right now, that’s looking like it may actually turn into complete un-insurability if you had COVID.

Yeah, because they’re seeing cognitive problems with some folks. They’re seeing ongoing pulmonary issues to difficulty breathing. I mean, there’s so many unfortunate long-term implications from having had COVID that companies are very wary. So that’s the thing about underwriting and we’re seeing it this year, it can change when companies find out that things are more troubling than they thought, and in unexpected ways.

So yeah, for now, it’s discovered that the long-term effects of having COVID aren’t that great. It may be something that isn’t an issue anymore in eligibility. That’s not, it’s kind of fluid, right? It’s a very volatile situation right now with COVID. So I don’t mean to lead with that, except that it’s just, you know, what’s on our minds right now.

08:58 Cathy Curtis:

So topical, I’m glad you brought that up.

09:01 Liz Eshleman:

Some of the issues that create un-insurability will be, and these are ones that I, there’s many issues, but I chose these to speak to because I think they’re not always, we don’t always think that this could be a problem. Like unexpected weight loss. Maybe it’s not an issue, but maybe it is. Having more than four drinks a day is uninsurable. Back pain that requires narcotic medication, or it’s just a disabling back pain, uninsurable. Any chronic pain, as I was mentioning, is going to be an uninsurable condition, and that’s probably not going to change unless the person has some really unusual change, you know, change in their health, because usually, if something is disabling, it’s hard to get back up and running.

You know, if it’s a bad back pain, and folks are a little bit older, it’s not usually getting better. Frailty, a head injury. I had a client, unfortunately, recently, who had forgotten that she had. She had rented a car, and the guy was showing her how the trunk worked. And he slammed the trunk down on her head. Well, that’s a whole separate thing. But she’s now in trouble because the MRI showed something else, something else in her brain matter that indicates memory loss. So any MRI is really tricky territory.

10:28 Cathy Curtis

Let me interject sorry. So this is a good example. So when you have this initial phone call with a potential client, long-term care buyer, you will ask them all these things?

Liz Eshleman:

I do I tell people, per day, do you smoke? Do you have any chronic pain? Issues? Are you taking any…

Cathy Curtis:

And you ask about any medications? Depression, antidepressants, things like that?

10:57 Liz Eshleman:

Yeah.

10:58 Cathy Curtis:

Tell me about that. Because a lot of people take antidepressants for years to handle, you know, anxiety or whatever. How do the companies consider that?

11:08 Liz Eshleman:

That’s a great question. You know, it’s a little counterintuitive. They actually, the company underwriting departments, like what they call stability. So if a person has been on a medication for 10 or 15 years, the companies don’t view that as a negative. As long as there have been no hospitalizations for depression or no serious episodes. If it’s just the maintenance of well-being and the medication’s working, the companies actually like that, because they see that this potential issue for that person has been handled.

What they don’t like is a new diagnosis. So let’s say something happened, a person lost her spouse, and she fell into a depression. And she had to have medication that was increasing in dosage. They wouldn’t like that. Or she got on her feet, she was feeling better. Now she decreased her dosage. They also don’t like that. They don’t like volatility in a person’s health history. They want to see stability.

12:10 Cathy Curtis:

Okay. Okay, so you find these things out?

12:14 Liz Eshleman:

Yeah, I asked my clients, I tell them, you know, please bear with me, but I’m your advocate. And there, they tell you everything, open kimono, so to speak. And then you know, the insurance company. So you will say I think we can apply given what you’ve told me or you say, you know what, either you’re not going to be eligible at all, or this is a course of action I think you should take, wait six months. See if, you know, see if you’re off the medication, whatever. Or maybe in the case of a widow who just starts taking an antidepressant, if you’re on it for how many years before you come back.

And you know, it’s not that it’s not that difficult. For instance, usually a depression like that is situational, and does kind of abate over time. So as long as, even if they’re on the medication, that’s okay. But it has to be for a period of time, usually three to six months, at least, before the company will then take a look at whether or not they want to underwrite you.

13:17 Cathy Curtis:

Okay, got it. So this brings up a thought in my mind. I remember when I used to, when we first started to work together, I’d have a client and I’d say this person probably needs to buy some long-term care insurance. I don’t think their assets are going to last, or it could insure the assets they have, you know, there’s a couple of reasons to buy it. And I’ll call you and go, could you just give me an estimate of what you think it would cost for this person. You’d say, you know what, I really can’t give you an estimate. There are so many factors that come into play, I really need to talk with the person to find out about their health history. And now, I understand why. Because it’s like you’re the gatekeeper, to figure out whether someone will be eligible or not, and to help them.

14:01 Liz Eshleman:

Yes, and I never want to give a person a false indication of whether or not they can get coverage. If I don’t have the, if I don’t know about their health history, I really don’t know. Not only whether they could get it, but if they can get it, what would be the proper rate to quote, because there’s different rates for this type of insurance, just as there are, you know, rates for life insurance. So, you know, it makes it sound like this is difficult to get, you know, it kind of is. Yeah, it’s kind of hard to get long term care insurance.

14:31 Cathy Curtis:

Exactly. That’s that. Okay. So that’s a good summary of the eligibility issue is it’s hard to get. It’s worth talking to a long-term care consultant to find out, but don’t be too disappointed if they’re, you know, there’s some roadblocks there or you might not be eligible. Okay, so we’re gonna move into the types of products that are out there because this industry is ever evolving, as a lot of industries are, as they figure out what’s profitable and what’s not. Particularly in the last would you say, five years, there’s been a lot of change in the types of products out there.

15:14 Liz Eshleman:

Yes, I would say that traditional long-term care insurance began in the 1970s. And it’s just like every other insurance product we buy to protect, you know, a car, an automobile accident or a hospitalization. Or you know, a fire in a home, we buy this kind of insurance where, if something happens, the claim is covered. But we never get a return of that premium, we just had that risk covered, we had transferred that risk onto the shoulders of the insurance company.

That’s what we call pure insurance. And traditional. That’s the model. And I’ll go into more detail about that momentarily. The other model that has become very attractive, especially to my clients of high net worth, is the hybrid, where in fact, you’re not just really covering that long-term care risk. With that pure insurance, you actually are doing a couple of other things, you’re buying life insurance, whether or not you want life insurance isn’t really the point. By buying the life insurance with this product, that’s called a hybrid, then you’re locking in your rate. With additional insurance, your premium could change as it does with car insurance, with health insurance, it usually goes up. That could happen with the traditional insurance product. With the hybrid, the rates are guaranteed. That’s one major difference.

The other thing that’s very different with a hybrid is if you wanted to, you could pay it off, in a lump sum, or over 10 years or 20 years, there’s more flexibility with the payment options. With the traditional coverage you pay ongoing every year until you’re on claim, meaning you need the benefits, then you’re done paying. So that with the traditional leaves a question about how many years am I gonna pay. The other thing, of course, is that if you never need long-term care, the money you put into a hybrid would return to your estate to pay to a beneficiary as a death benefit. You can also get money back if you decide, you know what, I don’t want to play this long-term care insurance game anymore, you can get a return of premium with the hybrid.

18:00 Liz Eshleman:

Yeah. And one more very significant fact is that with the hybrid, there’s one company that offers what we call unlimited meaning, you know, heaven forbid, you have Alzheimer’s, and it lasts 10 or 15 years, this hybrid coverage would continue to pay benefits, as long as you needed to receive those benefits.

18:24 Cathy Curtis:

Okay, you’re bringing up a good point about the average amount of time most people will spend with a severe long-term care need, or let’s say, in a nursing home. And yeah, what I’m reading is for, oh, by the way, there’s a great study that Morningstar puts out every year or the last couple of years, about long-term care statistics. And I’ve pulled some stats from that. And for women, the average is 3.7 years in a nursing home. And for men, it’s 2.2.

So right, so I like to know about those numbers, because that tells me as a financial advisor, if a client doesn’t have the resources to buy more insurance, like these unlimited policies, which you want an unlimited policy, but they’re expensive. So if you could at least get the average amount of years, you’re getting help to cover the cost. You know, you don’t have to have it fully covered, you’re getting help for it.

19:25 Liz Eshleman:

Absolutely. And as I like to say to families or to my single clients, you don’t have to crisis manage on day one. If you have a long-term care event, and you have a two-year plan, there’s two years where your family, your friends, your loved ones are helping figure out if your need will be more ongoing, longer than two years. They’re helping figure out, how are we going to pay for that, you know, whatever it will be, and you weigh in on that if you’re available to do so. Right? But people sometimes think, well, if I can’t get unlimited, why would I buy this at all, which I think is missing the point of the stress of trying to navigate a long-term care event with no plan in place.

20:15 Cathy Curtis:

Yeah, I agree. Also, the mechanism of when you initiate a claim of using the money is something that a lot of people don’t understand. They think it’s a daily benefit, which it is, but then there’s actually a maximum in most cases. Could you explain that? And do it based on the traditional long-term care where you’re paying every month for so many years?

20:41 Liz Eshleman:

Okay, sure. So let’s say your daily is $150. So, I’m going to speak to it from two directions. And I hope this is helpful in answering the question. If you need to spend more than $150 a day, then you have to come up with that additional amount from assets. But if you need to spend less than that daily amount, because maybe you only need a little bit of home care, and it’s only $100 a day, then the amount that you purchased will roll over. And so your daily is, it’s a maximum. You can’t get more out of your policy than the daily that you structured when you bought the coverage. Is that helpful? Is that what you wanted to know?

21:32 Cathy Curtis:

Yeah, but then most people are also purchasing, let’s say they can afford three years of coverage. So it becomes $175,000. In total, once they’ve reached that $175,000, it’s the pot, you don’t have any more money. So it’s a daily maximum, but it’s also a bucket of money that is finite.

22:01 Liz Eshleman:

Yes, that’s right. And, you know, maybe it would be helpful to actually talk about a particular plan for a minute. To illustrate what you’re getting at. Okay, so I structured a plan with a company. It’s Mutual of Omaha, right now their pricing is terrific in California. They’ve upped their prices around the country, but California, they still have, I think a more affordable plan. And I structured it to be a $200 a day benefit. So that $6,000 a month, that will more than cover homecare, that will perhaps cover almost all of assisted living. And I structured it to last two years, to our point about something’s better than nothing.

So the bucket of money is $150,000. Now $6,000 monthly benefit, bucket of money, $150,000 is terrific today. In 20 or 30 years, it won’t buy as much. So we need to add an inflation factor, right. So this benefit will increase. I don’t want to get too much in the weeds. But just to know that if a 55-year-old woman buys this policy today, she can count on it for her money to have doubled. Her $6,000 monthly benefit will be $12,000 monthly benefit, her $150,000 pot of money will be $300,000. It may last longer than two years. The two years is not a factor we should focus on. It’s just a factor in an equation. We multiply the monthly by the two years and we get the bucket. As long as there’s money in the bucket, you’re good to go.

23:47 Cathy Curtis:

Yeah. Okay. And so going back to my earlier point, if so, you’re saying that would be $6,000 a month, right? You’re buying $6,000 a month? If the costs are higher than that you pay those out of pocket? Correct?

Liz Eshleman:

Yeah. Okay. But it’s likely, I don’t know, California can be expensive. And it also depends on the facility. You can pick a premium facility and you’re fine with that. You go, okay, my long-term care insurance is gonna cover this much of the cost. And then I’m gonna pay the rest out of pocket because I want a nicer facility. And that’s perfectly fine. At least you don’t have to raid your retirement income at the rate of in current dollars, $72,000 a year, that’s not hemorrhaging out of your retirement.

24:30 Cathy Curtis:

Right. Exactly.

24:32 Liz Eshleman:

This plan that we just discussed for a 55-year-old woman is $275 bucks a month. Yeah. Which really, if you think about you get $6,000 a month for $275 a month and the $6,000 is growing. I think it’s a pretty good deal right now.

24:48 Cathy Curtis:

Yeah, you just have to understand that that may not cover all your costs.

24:54 Liz Eshleman:

That’s right. And that’s something that we look at when I talk with my clients. We go into detail about, I pull up a cost of care survey that we look at together to look at the current costs of care if they’re in San Francisco, or if they’re up in Sacramento, or if they’re, and I work with folks all over the state. So sometimes, I just finished helping a client up in Clearlake, much less expensive up there to receive care. So we look at that and figure out where do you want to go? Where do you think you’ll be? And if it’s an area, of course, it’s going to be some of the most expensive care, but $6,000 a month will help greatly even if you have to supplement.

25:34 Cathy Curtis:

Okay, and so this example you’re giving, I take it that this 55-year-old woman is getting the best rates. And so that means that she has really good health.

25:44 Liz Eshleman:

Yes, if she didn’t have terrific health, if she was on a blood pressure medication, let’s say, instead of $275 a month, it would be $325 a month.

25:54 Cathy Curtis:

Okay, got it. So you’re quoting the best case scenario with that first quote. Okay. Now, that makes complete sense. Okay, I want to talk about some of the other benefits. And we should probably talk a little bit about why you might not want to buy a policy so you know, so that people can have both sides.

You’ve often spoken to me about the benefit of having a care manager, right? Can you describe how that works? And do all the insurance companies offer that?

26:29 Liz Eshleman:

That is such a good question. Depending on the company, it might be a consultation on an 800-phone number. But with Mutual of Omaha, it’s an actual licensed health care professional, who will meet with the client, his or her family, and figure out a plan of care based on their needs. They don’t work for the company, because there’d be a conflict of interest, right. The company would want to keep it low, or, you know, assess the person as not needing as much care. So it’s a third party.

But I do think it’s so important, because even people who have really a terrific retirement portfolio, very well to do, if they don’t have someone help them access their money and help them figure out how they’re going to spend without selling what stock or liquidating what asset. See the care coordinator functions almost at the person, you don’t have to do that asset depletion. And now she or he is going to help advise which agency is a terrific agency, or which facility has a bed. When my mom needed care, I was running around trying to figure out what facility would be able to accept my mom. Oh, and I had to do all that research.

27:44 Cathy Curtis:

Okay, so when you choose a company, you’re thinking about that for the client? Do they offer that?

27:52 Liz Eshleman:

Absolutely. And I talk about that at length, because it’s not just a bucket of money you’re buying. You’re buying an infrastructure, so that you actually have care that can be managed by this care coordinator. And let’s say you don’t like your caregiver. You went through a particular agency, the person there’s a personality problem, or you don’t like the way the companies run the agency. You call the care coordinator, you say, I need a different agency entirely. No problem. That becomes what that care coordinator puts in place for you. So I cannot stress enough Cathy, how stressful that can be when your parent is failing, or when you yourself are failing. You don’t want to have to wonder, how am I going to get care?

28:41 Cathy Curtis:

Let me just bring up something else. And because there’s a lot of good, there’s a lot of myths about, oh, I’m not gonna buy long-term care, because when I need it, they’re gonna say you don’t qualify. So did you know what that whole thing? Does that person help you navigate that?

29:02 Liz Eshleman:

Absolutely.

29:03 Cathy Curtis:

Let’s talk about, well, a lot of people know this. But when do you qualify? You buy your policy, you’re 80 years old. All of a sudden you’re not well, and you can’t take care of yourself. So when would you go, maybe I should initiate a claim. Go through that. And does that consultant help with that?

29:28 Liz Eshleman:

Yes. Okay. So I will give you a real case scenario from my last six months helping a client. And I think you’ll be surprised at the profile of that client. But let me speak more broadly first, that I believe a person who feels in any way frail, they’re just a little unsteady on their feet, or they have bad arthritis. It’s hard to button the buttons on a sweater. It’s worth calling the claims department. You call the company and they’ll put you in touch with this care coordinator, who will then talk with you. And more likely than not, people, especially if it’s a couple where the spouse that might be a little more robust is helping the frailer spouse, they don’t realize over time that that frail spouse could have been on claim.

So that’s why you want to call the claims department immediately and open a claim. There’s no harm, you don’t have to take the money, but at least you get the assessment. And the care coordinator is talking with the doctor, your doctor, accessing records so that they can see, has there been a deterioration in their memory? Or has there been, you know, a risk of falling in the tub because they’re just not steady on their feet? The care coordination is not so much to bar you from receiving benefits with the companies I represent. Really this care coordinator is to help you access the benefits, right.

And I would like to give you the case scenario, a 55-year-old woman this year, you know, trying to get out and get some exercise during our lockdown, took a bike ride up on Grizzly peak in Berkeley. She wasn’t even up there yet. She was just getting out of her driveway. And she fell. And you know, the way she fell and the way the bike and she interacted, she really badly mangled her knee. And she’s 55 so I think that is very young, that’s younger than I am. And she was on claim for six months, because she had to have surgery. And she could not bathe herself. She needed help getting dressed, pulling on pants, it’s you know, when you can’t stand up, you can’t do very much at all. Her husband was trying to help her. He called me kind of in a panic. And I said slow down, Jim, you need to call the company. Well, they did, and the care coordinator worked with them to assess she needed help. And she went on claim. And it saved, I wouldn’t go so far as to say it saved her marriage, but I’m sure it helped a lot with frayed nerves.

32:23 Cathy Curtis:

Okay, couple of industry speak things. On claim means that she bought the insurance probably a few years ago. This was an incident that was covered under long-term care, they made a claim and they’re getting the insurance to cover it.

32:41 Liz Eshleman:

Yes, on claim just means now you’re receiving the benefits that you purchased when you bought your insurance. Now you’re accessing those benefits.

32:49 Cathy Curtis:

Okay, so another point is, and there’s a lot of misunderstandings here, is that long-term care insurance is just for old age care. And this is a perfect example of where it’s not just old age care. It’s also the rules, or tell us the rules about the things that you have, you can’t do, you know, just give us the basics about long-term care. So this is important.

33:13 Liz Eshleman:

Yes, it really is important. So the need for care has to last for 90 days or more. And the need for care is defined by needing help with two out of six activities of daily living (ADLs). And those six ADLs, the first two that tend to trigger a claim, meaning that the money you want to come in from that big bucket that you purchased is available to you. If you need help with two out of six, those first two that tend to trigger that and allow you to get your money are need for help with bathing and need for help with dressing. Not because you can’t wash yourself. Because you’re at risk of falling from, for instance, this client who hurt her knee, she couldn’t even take a shower. She had to do sponge baths.

I mean, okay, so bathing, dressing. The next two of six are toileting and transferring, which are somewhat similar in that they require the core muscles if you can’t stand up on and off the toilet. Or if you can’t get in and out of a chair or a couch or a bed. Because there’s just something where you can’t get that energy to get yourself to rise up. Usually that’s a paralysis or a frailty. Or you can stand up but now you’re dizzy and you could fall, you need that arm to lean on. That’s the need for help with transferring.

Okay, okay, and then the others are incontinence, if you have to wear a diaper, or eating, which is usually end stage if you need help actually feeding yourself, right? That’s not usually a typical first activity of daily living that you need help with. Okay, now one more thing, you could be quite robust physically. But if you, and so maybe all of your ADLs are fine, you can bathe yourself, you can dress but you have a severe cognitive impairment. In that case, you’re also eligible for the benefits, right? As long as the need lasts 90 days or more.

35:18 Cathy Curtis:

Okay, and I’ll just throw in a real-life example. My mother qualified because of mental impairment. She was, she stayed pretty physically robust. Okay, well into her 80s. But she was starting to forget things and she wasn’t taking her meds because she would forget. She wasn’t turning on the heat. The house was freezing. So that’s why she qualified.

Okay, good. So yeah, those are some of the basics. I’m really glad you went over that so well, so people know what triggers a claim. Doesn’t have to be when you’re old and are about to go into assisted living or nursing home. It can also be when you’re younger, and you have an accident.

36:06 Liz Eshleman:

Yes, this client of mine who had the bike accident, you know, was always at home.

Plus, shouldn’t we talk about the real reluctance people have now to actually go into facilities to receive care?

Yes, that is a huge deal. I mean, a large, large percentage of COVID deaths are still in nursing homes, or assisted living facilities, both patients and caregivers. I do know somebody who was going to move into an assisted living facility and pretty independent this year. And the main reason she doesn’t want to do it is because she may not be able to see her friends and family, because of restrictions. Now, I know that’s starting to lighten up with the vaccine, but there’s no way she wants to move in somewhere and not be able to see people.

36:59 Liz Eshleman:

And another thing to know is that typically, people who have long-term care insurance policies are receiving their benefits at home. I believe that only 12% are in nursing facilities. It’s between 7 and 12%. It’s a low percentage of people who have long-term care insurance policies who are in nursing facilities.

And the reason for that is because the families are not burning out, providing care at home without having that respite care that’s provided with a caregiver coming in. So if you have a plan in place, rather than the family immediately thinking, they are the caregivers, you know, you have money to buy caregiving from an agency. And you know what, you should just do that. That’s why you buy. That’s why we purchase long-term care insurance, is so that we save our families from the burden of having to provide care 24/7, potentially. So they can stay at home, they can still be with their loved ones, they don’t have to go to a facility. With my mom, in my own instance, mom had to go to a nursing facility because I couldn’t manage the care anymore. Because caregivers were quitting. And my doctor was worried about my health. That’s what happens with families providing care.

That kind of care is so hard. It almost has to be 24/7, because accidents happen. Yes, other people fall they break bones. And that’s so typical, that it’s almost a responsibility to get that care for your family.

Cathy Curtis:

That’s a really good point. And I’m wondering, I’m just curious, how many people buy long-term care insurance for their parents? Do you ever see that?

38:51 Liz Eshleman:

Yes, I do. I’ve had adult children purchase for a 75-year-old mom that they’re just worried about, that maybe their father just passed, and the mom is vulnerable and she’s fine, she can get coverage. But you know, they’re doing it so that in a way they protect themselves in this way. They want to be able to visit their mom, they want to be able to be with her, but they just don’t want to have to give up their entire life. Right? They might have young children. And that’s what happens in families is now you have to choose between caring for mom or going to your son’s soccer game. And it’s just a non-issue if you have a plan. It’s horrible. And it doesn’t have to be part of the equation at all if you have a plan.

39:42 Cathy Curtis:

Do most companies offer all home care, assisted living care, or any other type of care?

39:56 Liz Eshleman:

For instance, adult daycare, which is a place sometimes that folks with dementia will go during the day when a family member is going to work, that’s covered. Hospice is covered if you need it. So all the companies I represent cover every conceivable living situation in the United States, except you can’t take your caregiver on a cruise. I did have that question once.

40:29 Cathy Curtis:

Oh, that’s too bad. That would work, wouldn’t it? Okay, so we’ve talked about a lot of the benefits of it. Do you see, what are the downsides? I mean, I’ll bring up one. Of course, it’s not cheap insurance. And so affordability is an issue. And then the chance that you’ll pay premiums for all those years and never need it. Or you buy one of the hybrids where you put a huge chunk of money in and don’t ever need it. In that case, there are some ways to get your money back through insurance, or you’ve mentioned refunds. And I don’t know how often that happens where you don’t use it. Do you know?

41:19 Liz Eshleman:

I don’t have stats on that. You know, this is what I think about your question, Cathy. It’s a really good one. This is not for everyone. Long-term care insurance is only for people who want the peace of mind of not wondering what if, because to your point, it’s possible that you could pay a premium for 20 years or 30 years and never need care and die in your sleep at age 92. If that bothers a client, that they might never see a return on that investment in that plan, I tell them don’t buy this. This is for people who are worried and starting to think, I don’t know if I want to handle that risk.

So I always tell people, I don’t think there is a downside for the client for whom this is keeping them up at night, that they’re just not wanting that portfolio they’ve worked so hard to create, and those retirement savings, they don’t want them subject to this devastating risk. But there are some people, for instance, the very wealthy, they don’t need to purchase long-term care insurance. They can self-insure.

I do tell them, make sure you have a care coordination plan involved in your own estate management, right? If you don’t want your children saddled with it, make sure you get a very astute and much younger financial advisor. So if it’s a 70 year old, I have a guy, actually, he’s quite wealthy, and he’s buying a policy because he doesn’t want his kids to fight. But you know. But to not buy it is a completely legitimate choice. I just think it’s important to weigh why you’re not buying. And I think for most people, it’s just they don’t see themselves needing care.

43:08 Cathy Curtis:

Okay. A couple thoughts about the financial aspect. I want to clarify one term because I get asked about this a lot. Self-insure. Self-insured just means that you don’t buy insurance to cover all the costs, and whatever comes up with your long-term care needs, you pay yourself with your portfolio, or nest egg.

Okay, this is right on the same topic about the financials of buying long-term care and the way a financial planner looks at it. So I’ll do a financial plan for a client and one of the modules I look at is the need for long-term care. And what that really means is, if I think if they have a long-term care need, and I work with mostly women, so a need for expensive long-term care, can they afford it? And I’ll build that as a “what if” into their financial plan using my software tools. And if I see that, yes, they will, it’ll really negatively impact their plan, I start thinking about whether they could afford long-term care or not.

So that’s one aspect, the person who has you know, saved a good amount of money, but not enough maybe to cover a catastrophic expense of long-term care. That’s one example. The other example is a high-net-worth person who has plenty of savings, and when I put those numbers in the plan, and there’s a catastrophic health care need, they can pay for it and not run out of money. Okay, there’s that person, but they do spend a lot of their estate on long-term care. Maybe they have other ideas that they want to use there as well. For other than paying for long-term care, and that insurance and long-term care insurance policy can be a way to ensure that they don’t spend their estate down.

So I think that would be a need for someone of high net worth, who could probably afford to self-insure. And I think that’s a legitimate use of long-term care. And sometimes the numbers work out surprisingly well, especially with the hybrid policy. So the real sticky issue is the person who really needs long-term care insurance, but really can’t afford it. That unfortunate. And, you know, things change over time, maybe there will be more products that come out or more services that come out to help those people. But for right now, that’s, that’s kind of where it is.

And so I help people work through that affordability issue. And then the next step I advise on is to talk to someone like Liz, to find out about eligibility, get the quotes on cost, find out what it all covers. Then they come back to me, we go over it together. So you’ve got an advocate, you’ve got a long-term care consultant, and you’ve got a financial advisor that’s going to honestly tell you is this in your best interest or not to buy this long-term care policy. And, that’s how it goes on the financial end.

46:29 Liz Eshleman:

And Cathy, I think that to really underscore what you’ve said, as a long-term care consultant, you can tell I’m passionate about it, I believe in it. But I’m never going to say to a client that they should buy it. I’m only going to try to help them uncover whether they really feel they want and need it. And then you and I talk together about is it affordable, and you ultimately can weigh in on that for them.

So I just want your clients to know that it’s almost a fact-finding mission, right, as to whether or not this is appropriate for them, suitable for their finances, that they can afford it. And if they like what they see, I’m happy to help. But I never want to feel that. Even though I’m passionate about it. And I think it’s a really important topic to look at. I never want to feel that I’m pushing it on anyone, that it’s simply getting the information in their hands so they can decide what they want to do.

47:33 Cathy Curtis:

Exactly. Okay, so this has been so great. I hope we didn’t leave out any key information. Is there anything else you want to add about long-term care insurance?

47:50 Liz Eshleman:

I think we covered so much today. And honestly, if there’s something we didn’t cover, let’s revisit it. If your clients can call you, and then give them my number if they want to call me.

48:03 Cathy Curtis:

Okay, well, for the viewers who aren’t my client and listeners, tell us how a person could get a hold of you if they wanted to.

48:12 Liz Eshleman:

Well, I have a website. And I’m happy to receive a text or phone call, and all that info is on the website. And my email is liz@eshlemaninsurance.com.

48:51 Cathy Curtis:

Okay, great. And I will include that and your website in the show notes, as well as that Morningstar study, which I think is fascinating on the statistics about long-term care. And then Liz, if there’s any other brochure or any articles that you think are pertinent, I’ll add those to the show notes as well.

Okay, everyone, thank you so much. I think this will give you a really great primer on what long-term care insurance is about. Feel free to contact me at cathy@curtisfinancialplanning.com if you have any additional questions.

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Women and Wine: A Love-Hate Relationship

There has been a distinct shift in the way I and women I know feel about wine. Before it was considered sheer pleasure – enjoying a glass with a meal, wine-tasting with friends, and developing a palate. Then, somewhere along the line, it became more of a routine: come home from a day of work and pour a glass while making dinner. Then, maybe another one. Drinking wine became a little less “special occasion” and more of an everyday occurrence.

Women, Wine and Health
While we continued to enjoy wine, we followed the various studies that would come out about women, wine and health. Many concluded that moderate alcohol intake lowered the risk of heart disease because it acts as a mild blood thinner. Some studies touted the heart-healthy benefits of red wine because of an antioxidant compound, resveratrol, found in the skins and seeds of grapes. But there were also studies that showed a stronger link to women, alcohol and an increased risk of cancer, mostly driven by breast cancer.

Like many health studies, those about alcohol intake were often conflicting or inconclusive, but it did sew seeds of doubt as to whether that daily glass or two of wine was such a good thing for our health. We have begun to think that maybe we’d be better off without it. However, like many behaviors that become habits, we have found that wine drinking is not so easy to stop. In a recent gathering with a few women colleagues, discussing our goals for the coming year – 3 out of 5 said they’d like to curb their wine habit.

The Love-Hate Relationship 
Herein lies the love-hate relationship. We know that wine is probably not great for us – it may cause disease, it’s full of sugar, it makes us lazy, and it can be addictive. But, its pleasures are compelling: a glass of wine signals the end of a hard day of work and the start of a relaxing evening, it evokes a feeling of “la dolce vita,” and the alcohol takes the edge off whatever may be bothering us at the time.

My feelings about wine drinking have shifted. I have decided that I don’t want to drink wine as much as I used to. I don’t like the possibility that it might make me sick, is addictive, and I don’t want the extra calories. So I’ve taken steps to curb my habit: I’m not drinking wine on most weeknights, and I have substituted kombucha or mineral water with lemon in my wine glass.

Just out of curiosity and (because I’m a financial advisor!), I did a calculation to see how much money one could save by curbing a wine habit. To keep it simple, these are the broad assumptions:

– There are five glasses of wine to a bottle (5 ounce pours)
– Two glasses of wine consumed per night Monday-Thursday
– A bottle of weekday wine costs an average of $30.00
– Three glasses of wine consumed per night Friday-Sunday
– A bottle of weekend wine costs an average of $50.00.

Calculation:
2 glasses x $5.00 x 4 x 52 = $2080.00
3 glasses x $10.00 x 3 x 52 = $4680.00
Grand total: $6760.00 per year.

So another added benefit to reducing wine consumption is better cash flow!

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Forward-Thinking Tax Strategies to Implement This Year

Many people dread tax season. The idea of digging through all of your financial records, working through the filing process, and hoping you submitted everything correctly to avoid an audit is stressful.

And the worst part? It kind of feels like you can’t win. If you have your employer withhold too much money from your paychecks for taxes, you’re essentially giving the government an interest-free loan (even if the refund is a fun windfall). On the other side of the equation, if you underpay on our taxes over the course of the year, you could owe a significant amount of money.

As much as we may wish that we could wave a magic wand and have the tax season stress eliminated from our lives – that’s not a real possibility. As the old quote from Benjamin Franklin goes, “Nothing can be said to be certain, except death and taxes.”

If we can’t avoid dealing with taxes, we need to find positive ways to incorporate them into our financial plan. Luckily, there are a few things you can do to lower your taxable income and make next filing season easier.

Check Your W-4

According to NerdWallet’s 2018 Tax Study, only 35% of Americans are aware that they can adjust their federal tax withholdings anytime over the course of the year. Your withholdings can help you to adjust the amount of taxes you pay out of your paychecks to ensure that it’s correctly calculated based on your current income and your total number of exemptions you claim.

As your lifestyle changes over time, the information on your W-4 should change. For example, if you don’t claim your spouse, children, or other dependents on your W-4 as exemptions, you might consider making adjustments to reflect your current living situation.

Look to Reduce Your Taxable Income

If paying taxes overwhelms or frustrates you, you may be able to take advantage of a variety of savings accounts that help you to save money on your taxes. These accounts also help you to achieve long term financial goals – like growing your wealth for retirement planning, saving for your children’s college education, or covering medical expenses.

Retirement Planning

Your workplace 401(k) is a tax-efficient account. In other words, it’s funded with a portion of your income that’s pre-tax. Other retirement savings vehicles that are funded with pre-tax income are:

  • 403(b)
  • 457 plan
  • Traditional IRA
  • SEP IRA

Using these retirement savings accounts to lower your taxable income is a wonderful way to lower your current taxable income while maximizing your money and preparing for future success.

529 Plans

As a result of the new tax code, 529 Plans are no longer just for college education expenses. Parents can use a 529 plan to fund their child’s education from elementary to high school, as well. However you choose to use the funds in your child’s 529 plan, it’s important to note the tax benefits of these accounts. All earnings from a 529 plan grow federal tax-free, and you won’t be taxed when you or your child choose to tap the account.

Although this account doesn’t technically lower your total taxable income, being able to save for your children’s education and not face a capital gains tax when you finally access the funds is a tax benefit that’s essentially unmatched.

HSA and FSA

A Health Savings Account and Flexible Spending Account are two other key ways to save money on taxes for next year. Although you may need to meet certain healthcare plan requirements to open them, if you’re eligible – they offer another opportunity to reduce your taxable income.

HSAs, in particular, are instrumental in tax efficient financial plans. As they’re funded with pre-tax money, just like your 401(k) or other workplace retirement plan, they lower the amount of income that’s viewed as taxable by the IRS. However, they also roll over from year to year and can be used for qualifying medical expenses.

Whether you have large medical expenses in your future that you’re planning for, or you just want to save for the inevitable increased health-related costs associated with aging, HSAs are an excellent savings vehicle to use.

Get Organized and Speak With a Professional

No matter what strategy you choose to implement, it’s wise to get organized now. Don’t wait until next filing season to get started, you’ll only cause yourself equal amounts of overwhelm and frustration. Instead, stop the cycle by reaching out to a financial planning professional to learn more about these and other options to optimize your finances and reduce tax-related stress.

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Curtis Financial Planning