Helping A Senior Loved One With Financial Decisions After A Loss

A guest blog by Lucille Rosetti from Thebereaved.org

When a loved one passes away, there’s often so much to think about that figuring out the details can be overwhelming. From planning a funeral or other services to making major decisions about whether to keep a family home or sell it, there is often so much to do that things get overlooked. For seniors who have just lost a spouse, finding a way to cope with grief while making decisions about their own future can be next-to-impossible.

Photo via Pixabay by Geralt

If your senior loved one has recently lost a spouse or partner, it’s important to find ways to help them make the right choices for their needs, both present and future. That can be difficult, especially if there are health issues involved, but it’s imperative that your loved one feels safe and comfortable in moving forward.

Here are some helpful tips on how to help a senior loved one handle financial decisions after losing a spouse:

Get paperwork together

Having the correct paperwork -- and keeping it neat and organized -- will help your loved one finalize insurance policies and take care of any accounts that hold both their name and their spouse’s. Assist your loved one with obtaining several copies of the death certificate, any insurance paperwork, military discharge papers, the Social Security card, marriage and birth certificates, and copies of the deceased’s last will and testament. Keep the originals in a safe place, and put copies into an accordion folder where they can be easily accessed.

Go over insurance policies

Health and life insurance policies can be difficult to understand, and the last thing your senior loved one probably wants to do is wade through several pages of legalese. Look over the paperwork and help your loved one determine whether what types of policies apply to them and what they need. It’s also worth determining if they may be able to sell a life insurance policy, which can help provide extra income down the road. Go the extra mile and prompt your loved one to seek the help of a financial advisor who can give sound fiduciary advice and help your loved one implement a plan for their future needs.

Take care of the most pressing matters first

Because there’s so much to think about in such a short time frame, it’s important to help your loved one focus on the most important matters first. This means managing bills like the mortgage and any other monthly payments that are due; they can worry about the bigger picture a little later. Trying to figure out whether to sell their house is a stress that doesn’t need to be added to the grief of losing a spouse. This discussion can be tabled until life quiets down a bit and your loved one feels ready to make that decision.

Encourage them to stay in the home for a little while

 While selling the home can be an income boost and help save money down the line, it’s a good idea to encourage your loved one to stay put for the moment, until they have a good handle on their finances and are certain the housing market is stable. It may take a little while to get the home ready to sell or to find one that meets all of your loved one’s needs, so don’t let them make any hasty decisions.

Keep spending under control

It’s a good idea to make sure your loved one has a handle on their finances, so encourage them to create a budget and look for apps and websites that will help make staying on top of their spending easier.

Helping your senior loved one make difficult financial decisions after such a major loss won’t be easy, but in the long run it will help make things much smoother. Get organized and make a list of all the things that need to be taken care of, and include your loved one in all the decision-making. With a good plan, you can help reduce some of the stress they’re feeling.

This is Probably Why You Shouldn’t Ask Your Friend for 401(k) Advice.

Most of us have great friends and co-workers who we rely on for help, advice and insight.

Elle Mills recently asked her tattoo artist friend Tavian to give her a great first tattoo. He ended up giving her a tattoo of a heart with his Twitter handle?!?

Rather unfortunate. 10 minutes of fame can’t be worth that price.

In any event, just as it was a marginal decision for Elle to turn over the entire process of her first tattoo to her friend, it would be just as bad of an idea to ask Tavian how she should invest her 401(k). And not just because he probably shouldn’t be trusted.

If you are picking your 401(k) or 403(b) investment choices by asking your friends and co-workers, you’re not alone. It is a very common strategy and clients report to me all the time that they simply “asked an older person in the office”.

Here are three reasons why that isn’t a great approach:

1)    Even though it may seem like many aspects of your situation are the same – you both work in the same department and for the same employer, you are both saving for retirement and you both don’t pay a ton of attention to the stock market, your situations are probably more different than you think. Understanding your unique circumstances and risk tolerance is a critical step in understanding how you should invest your 401(k) or any assets.

2)    It’s hard to measure, validate and substantiate any claims that “my portfolio has done pretty awesome”. It very well may have had a great one or two year run, but that could actually have been due to luck. We also have to consider “great” compared to what. A great bond fund will look very different than a great international equity fund. And just because a fund has done great in the past, doesn’t mean it will be great in the future.

Making choices where you don’t end up with a diversified portfolio aligned to your level of risk will generally mean poorer long-term outcomes.

3)    Many of us are influenced by the forces of behavioral economics:

> We like to have the comfort of knowing that we are doing what others are doing – a group mentality.

> We have the illusion of spreading risk by deciding to invest 10% in each of the 10 fund choices available.

> Being overconfident in our company stock.

> Just procrastinating and leaving all our investments in cash.

> Knowing you shouldn’t ask your friends, but picking your funds the way you pick your NCAA basketball bracket.

All of these forces, and many others, conspire against us and our attempts at making good financial decisions. You really have to have a thoughtful and disciplined plan to achieve the best long-term outcomes.

We have some step-by-step tips in our 5 Ways to pick your 401(k) or 403(b) differently than your basketball bracket, or, if you would like professional management of your 401(k) or 403(b), please schedule a free consultation or give us a call.

PLEASE REMEMBER:

- INVESTING AND INVESTMENT MANAGEMENT INVOLVES RISK, INCLUDING THE LOSS OF YOUR INITIAL INVESTMENT OR ANY INVESTMENT GAINS.

- PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.

- THIS GENERIC INFORMATION IS PROVIDED FOR EDUCATIONAL PURPOSES ONLY AND SHOULD NOT BE CONSTRUED AS A RECOMMENDATION FOR ANY INDIVIDUAL TO TAKE A SPECIFIC ACTION.

- PLEASE INVEST PRUDENTLY AND SEEK PROFESSIONAL HELP FROM A FINANCIAL ADVISOR, INVESTMENT MANAGER, ACCOUNTANT, LAWYER OR OTHER PROFESSIONAL ON MATTERS THAT YOU ARE UNSURE OF OR THAT ARE UNIQUE TO YOUR PERSONAL CIRCUMSTANCES.

- FINANCIAL PLANNING AND INVESTMENT MANAGEMENT SERVICES PROVIDED BY J. BRADFORD INVESTMENT MANAGEMENT, NASHUA NH.

Job Hunting Today?

Job Hunting Today?

A guest blog by Rachael Bohac

It’s been reported the first Wednesday in January is the biggest job hunting day of the year.  We can all understand why:  We just had several great days or weeks off for the holidays and now it’s back to the grind.  The terrible boss, the long days, the thankless projects, the menial raise.  The glimmer of hope that somewhere out there on the world-wide-web is a new position that will be the glass slipper your LinkedIn profile has been crafted for, is all the motivation you need to hit up Indeed and Monster.  Heck, maybe even the local newspaper. 

So, once you’ve properly caffeinated and answered the critical emails, you sneak a peek to see if the grass might be greener.  The day-dreaming about that big raise is brimming with enough optimism to get you through the dark, dreary January hangover of Christmas.

After the requisite resume submissions to the corporate black hole, a couple of phone screens and finally a face to face interview, you land that gig.  Sweet.  Now what to do with that the bursting bank account?  If you’re fortunate enough to have your credit in order, investing in a home is historically a move that leads to long term wealth.  Furthermore, there are several additional factors developing in 2017 that may increase the probability of that being true, not only for wealth creation, but your internal rate of return (IRR) for that cash during the period of time in which you own the property.  In plain English, the IRR is the return you get from using your new, hard earned, direct deposited, salary to cover your mortgage payments, taxes and insurance instead of rent paid to a landlord. This flow can create a significant return on your investment, especially when you sprinkle in the appreciation rate and tax deductions.

Yay! Sounds good, so let’s buy a house or two since mortgage interest rates are still historically low and home prices have modulated since the bubble burst in 2008. But you heard interest rates “are going up”.  Yes, that is true on a micro-level, but the buying power of the low interest rates is still undeniably strong.  For example, if people were getting 4% last year, but today you’d have to stomach the atrocity of a 4.5% fixed rate for 30 gridlocked years, that is a difference of $30 whole American dollars per month for a $100,000 of the loan. (Wait! Don’t fret, because you still have the ellusive IRR on your side).

Now chances are if you are looking to trade up your job, you might also be looking to trade up a home you already live in.  If you purchased a home a few years ago, you can likely roll that equity into the new place when you sell that home in the spring market.  The stress of selling your first house can be overwhelming, but 2017 has your back, because there are shockingly low inventory levels of homes for sale on the market, making every new listing get that much more attention and sell that much quicker. 

Next, you’ll tell me you’ve got no equity, but you still want that bigger house because your new job helps you afford it.  Seriously, no problem.  Despite stricter mortgage lending practices since the great recession, there remains several high loan-to-value (LTV) mortgage programs ranging from 97 – 103% of the purchase price to help you into your dream home.  

2017 is the perfect storm of good news for those dreaming of the first place to hang their hat or the place they can install their Griswold-Christmas-Bonus-Inground-Pool.  Now get out there and get those resume’s flying because it all starts by ditching that terrible boss.

Cheers to a prosperous 2017.

About Rachael Bohac

Rachael Bohac is a licensed Realtor with Keller Williams Realty Metropolitan out of Bedford, NH.  She’s been licensed since 2005 in the residential market and has additional specialties in multi-family, investment properties and financing solutions. With a M.S. in Marketing she brings an intense and comprehensive level of marketing to her listing clients.

www.RachNH.com

PLEASE REMEMBER:

- INVESTING AND INVESTMENT MANAGEMENT INVOLVES RISK, INCLUDING THE LOSS OF YOUR INITIAL INVESTMENT OR ANY INVESTMENT GAINS.

- PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.

- THIS GENERIC INFORMATION IS PROVIDED FOR EDUCATIONAL PURPOSES ONLY AND SHOULD NOT BE CONSTRUED AS A RECOMMENDATION FOR ANY INDIVIDUAL TO TAKE A SPECIFIC ACTION.

- PLEASE INVEST PRUDENTLY AND SEEK PROFESSIONAL HELP FROM A FINANCIAL ADVISOR, INVESTMENT MANAGER, ACCOUNTANT, LAWYER OR OTHER PROFESSIONAL ON MATTERS THAT YOU ARE UNSURE OF OR THAT ARE UNIQUE TO YOUR PERSONAL CIRCUMSTANCES.

- FINANCIAL PLANNING AND INVESTMENT MANAGEMENT SERVICES PROVIDED BY J. BRADFORD INVESTMENT MANAGEMENT, NASHUA NH.

Investing 101 Class -- now with emojis!!

I'm excited to be partnering with the Coalition for a Better Acre to deliver my revamped Investing 101 workshop on Tuesday, October 18th in Lowell, MA.

Now with emojis!!

I’ll be presenting in the 1st floor community room at 517 Moody Street from 6:30pm – 8:00pm.

The workshop is free, dinner will be served and you’ll have a chance to win a $25 Target gift card! Plus you’ll get 90 minutes of Jason unplugged.

I’ll answer questions and try to give practical, actionable advice in a pressure and judgment free zone. I hope you can join us.

You can check out the presentation slides, catch up on my blog posts or explore other educational videos that might help you formulate questions for the session.

Hope to see you there!

Chin-up All You Parents Saving For College - Here are 3 Quick Tips

Back to school time is hectic. New routines, new teachers, new friends and trying to figure out how to get everyone were they need to be when they need to be there, without hiring a fleet of UBER drivers. I for one will be typing my blog posts from my daughter’s ballet studio for the foreseeable future...

We eventually settle in to a routine and then for many, the reality sets in – the kiddos are one year closer to college and those over-sized payments for tuition, room and board are one year closer too. Panic. Denial. Procrastination. How about we plan our next family vacation instead?!?!?

After some mindless web surfing to distract us, some article, blog post or research report snaps us back to reality. How on earth are we going to afford to pay for college?

It's a question I hear often and it's a real problem for almost every family in America.

It's estimated that only 50% of families are even saving for college and of those that are, the average balance is roughly $10,000.  And unfortunately, that won't go very far.

Tuition, room and board costs will vary wildly, but for an in-state school, tuition, room and board and basic expenses are likely to run $35,000 - $40,000 per year. It will be more for out of state and private schools, less for community college. So let's say it's $160,000 all in for four years.

It's going to be very hard to fully save that much. If you start saving the day your child is born, and can somehow figure out how to squeeze an extra $500 out of the monthly budget and put it towards college and then assume a 4.5% annual return, you have a realistic chance of saving enough for college. Have two kids? That'll be $1,000 per month. Decide to make it a 4-pack? $2000 per month. And if you don't start until they are 9? Then you'll need to save $1,200 per month to get comfortably close. That's just not realistic for most.

 So what do you do? Three simple things:

1) First, I recommend ignoring the big, ugly numbers from tools, calculators and blog posts like this until your kids get much closer to college. You don't have a money tree, so the most important thing you can do is start saving now (or save even more) and save in a low cost, tax advantaged 529 plan. Even if you only get 25% or 50% of the way there, it can make a big difference. Don't be discouraged by the fact that you won't fully make it. There are lots of options and things change. A financial advisor, financial planner or investment advisor can help you evaluate your specific and unique circumstances, but 529 plans make sense for many. Bonus Tip: If you choose a Fidelity Investments Plan, you can goose your savings with a 2% cash back credit card.

2) Next, spend some time with your kids on PayScale.com. Have a discussion. Evaluate the salary ranges for the degree they are thinking about and potentially more important, the skills those graduates will be expected to have. Do they have or are they willing to acquire those skills? Do they realistically need a graduate degree to get a job? They might not be as interested in a particular degree if it isn't a match for their personality or if they need to move to a different city for the best opportunities.

3) Finally, start researching and applying for scholarships. Many are available to High School students and even grade school students. It will help prepare them for college, help them feel invested in the process and maybe inspire them in a particular direction.

Then as you get to the college precipice, consider working with a college specialist, such as my colleague Jack Wang, who can help those that are closing in on college deadlines navigate the FAFSA form submission process and overall funding process. For some, financial aid may be available and for many, different types of student loans are available. It can be hard to sort out, and someone like Jack can help make a difference.

There are no easy answers to college funding, or other difficult conversations about the right approach to college and making choices in college that pay off in the long run.  We can help provide a strategy and a plan as a first step.

PLEASE REMEMBER:

- Investing and investment management involves risk, including the loss of your initial investment or any investment gains.

- Past performance is no guarantee of future results.

- This generic information is provided for educational purposes only and should not be construed as a recommendation for any individual to take a specific action.

- Please invest prudently and seek professional help from a financial advisor, investment manager, accountant, lawyer or other professional on matters that you are unsure of or that are unique to your personal circumstances.

- Financial Planning and Investment Management Services provided by J. Bradford Investment Management, Nashua NH.