Love Means…Check Your Beneficiaries

philly-love-2013-photo-by-dct Love means that you should check your beneficiaries. Establish a regular time of year to do this. Between February 1-14 sounds good to me. Maybe in alternate years, but begin soon, if you don’t already do this.

What documents should you review?

Employment Related Documents

Your current company retirement plan: 401k, 403b, 457, pension, HSA, or company provided life insurance. If self employed, your SEP, Profit Sharing, SIMPLE, solo 401k, IRA, Keogh plan (for older readers), or Defined Contribution or Defined Benefit plan.

Your previous employer’s retirement plans, if not consolidated into a new Rollover account. Reminder: don’t lose track of old retirement plans! Here is one link to try if you have lost track of one.

Which payout did you select for the retirement plan, the joint and survivor or the single life payout? I knew someone whose monthly income dropped 66% after their spouse died, due to the spouse taking ‘single life payout’, on not one but two different pensions. Please schedule a robust conversation with your spouse about this, well ahead of your deadline to choose a survivor benefit. Enter the conversation with good intentions and an ear for the emotions involved as well as the numbers.

Personal Documents

Documents from the last century, related to a previous marriage, or that first IRA you opened up right out of college. (You did that, right?) Life insurance you hold that was purchased for you originally by your parents (when you were single). Life insurance purchased while in your child-rearing years. Or, now that you are single again, dig out the list of things you were going to change after the divorce was final.

Here’s a link with suggestions for finding an old life insurance plan. This article from Consumer Reports also highlights the popular site www.missingmoney.com where.  you can search for reported abandoned property. People I know have found utility deposit refunds, last employer paychecks, old bank accounts, uncashed dividend checks etc.

Transition Related Documents

Did someone else pass away and leave you assets? This could mean changes of your beneficiaries, or changes in your wills. Did you become a parent, or parents for the first time, or for the fifth time? Did you blend two families?

Was there a layoff or period of unemployment? You may wish to redirect your assets closer to home.  Was there a windfall? Did you win the lottery or get a very large bonus? Do you wish to give to charity or become a first time philanthropist?

Love means you are willing to review what would happen to your family when you are gone. Give your beloveds (and you) the gift of a review and doing some homework regularly to ensure your assets are distributed correctly. Remember, it’s great to have your intent known verbally,  but also review your beneficiaries to see that your goals and your documents match.

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Filed under Be Prepared, February Financial Task, For Love or Money, Life and Death, Uncategorized

Mending Your #SafetyNet

Edwin Harris - Mending The Nets
Edwin Harris – Mending The Nets (Photo credit: Wikipedia)At the end of the season, it’s a good time to mend your nets.

Updated Jan 2019.
Originally posted 2013.
Given today’s lengthy, record-setting US government shutdown and the hashtag #shutdownstories, this post needed an update. As a friend told me when we hit 40; “Exercise is no longer a luxury.” A safety net and emergency funds are no longer a luxury. This shutdown illustrates with stories the numbers about Americans living paycheck to paycheck.



When we reach the financial adult stage (your chronological age may vary); you may wish to mend or create a safety net. Safety nets are different from person to person; so feel free to select the pieces that match your own situation. 

Security Risk management: often solved with insurance products. Car, renters, condo, house, flood, fire and theft, cell phone, jewelry, business continuation etc. Even if you think you don’t have expensive things, you probably do. How much were your electronic gizmos? Can you afford being without [insert category here]? Many rental complexes now require renters to have insurance, which will also shield you from many liabilities (kitchen or electrical fire, water heater or tub overflow, leaky toilet, disposal failure, to name a few.) Check your specific policies for new exclusions based on the sharing economy, such as AirBNB or or using your car for ridesharing.

Savings (also known as cash these days due to barely visible interest). Rates are rising and one can earn more than whisper of interest One person’s emergency fund is $500, another’s is $10,000 and I have met someone whose security needs are met by one year’s income in the bank ($65,000). I like to suggest thinking of this fund in terms of months of income or expenses (whichever is greater). There’s a joke in there, sort of. What should be the minimum? My audiences are well informed and I hear 3-6 months from many when I ask this question. I suggest making the fund real by linking it to your insurance deductibles, the cost of 4 new tires, or even your family OOP, out of pocket limit for annual health care costs.

Residence  Home is where the heart is (and the bills) and your fridge. (see my earlier post called Clean One Refrigerator Shelf at a Time here)

Friends and Family Shoulders to cry on or celebrate with. Who can help you stay accountable to yourself? Who will understand and support your goals? Which of your friends or other loved ones can give you an assist with tangible or intangible help? Do you need to move into someone’s spare bedroom for three months while you save up for XYZ goal? (Tip: set a deadline for being in-residence-the relationship is something you don’t want to lose).

The Future What does your future hold? What’s on your bucket list?

Tools
Education, knowledge or wisdom (not to be confused with advertising, too many data points, endless supply of new products, Squirrel!),
Wisdom comes from mistakes, mistakes come from experience.  Or,

There is only one thing more painful than learning from experience, and that is not learning from experience.  ~Laurence J. Peter

Emotional IQ  Know yourself. Are you a DIY (do it yourself) person? How resilient are you? Can you reframe an experience and move forward? Do you want to bury the memories? What makes you feel shame (if anything) ? What are your money values ? Status or security, self fulfillment or self indulgence? Are you a planner, spontaneous spender, or celebrator?

How do you like to learn new information? Are you a lifelong learner? I have always enjoyed the opportunities I have had in my career to ask other people about their questions, or to consider what the important questions are for me when making a decision. Getting help with the right questions can be better than only searching for the answers.

Before You Quit Your Job-Five Factors to Consider

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Personal Goodwill in 2019

The “holidays” are over. Whether you call it the 12th day of Christmas, 6 January, or the Feast of the Three Kings, those days have passed.

  • Did you survive or thrive?
  • What traditions did you keep, or eliminate?
  • What are your resolutions and goals for 2019?
note notebook notes page
Photo by freestocks.org on Pexels.com

These are questions grabbing the headlines on Twitter, your local newspaper (all the sections), and perhaps your favorite podcastBut wait! What is your real goodwill for 2019? In financial terms we call it your balance sheet. For businesses, goodwill is an intangible which represents real value.

“The goodwill of a company increases its value, as qualities such as the company’s customer base, its brands, products, location, workforce and reputation demonstrate the company’s proven track record of generating income.” via Investopedia https://www.investopedia.com/ask/answers/010815/how-does-goodwill-increase-companys-value.asp

In a 2014 post on this subject , I urged readers to consider their true balance sheet. This goes beyond the numbers to include personal goodwill, relationships, intangible assets, and experiences.  In 2019, with the 24 second news cycle (no longer 24/7) , market volatility, increasing interest rates, and a government shutdown, I believe it is ever more important to total up our non-financial assets.

A friend recently learned her skills were worth 12% more annually in the job market, but that it would require a heavy loss of professional autonomy. She chose to keep her autonomy and turn down the position. I recently was able to attend a birthday party for a family member where 15 relatives were in attendance; we ate, we drank, and we all enjoyed the surprise live music delivered to her door. It included Happy Birthday, on the bagpipes! As some of us mostly attend funerals, it becomes a priceless family memory.

If you have beloved family members who no longer travel for any reason, you have the experiences of travels with Mom, Aunt Susy, Uncle Sergio, or attending a cousin’s outdoor wedding (cupcake tower!)


Author and her mom at Fort McHenry National Monument. Photo credit to kind tourist.

During a time of job loss, or even getting home from a doctor’s appointment, do you have friends, family or faith institutions who can help you? That goes on your true balance sheet. Do you and your children talk or spend time with other over vacations, holidays or during stressful times? That is worth a lot. For those who have furry kids, same question. For singletons with an extensive chosen family beyond your family of origin, I hope that you find humor,  comfort, and support in these relationships.

Add those to your own bank. Research tells us about how our brain enjoys them more than the acquisition of things. Experiences generate three times the memories, from the anticipation, the actual event, and then the retrospection afterwards. I have a series of #UnfortunateEvents, for example, that comprise many of my personal vacations. They are funny now… but were not at the time. (River rafting accident, drunk guy in the aisle at 30,000 feet, and crying on an expensive Venetian gondola ride to name a few).

Personal and professional resilience count on your balance sheet. Deep breathing during stressful moments counts. (For some, that would be before public speaking. I find yoga more difficult than public speaking, but that’s just me!) Being intentional about your spending adds up. Decreasing debt is important as it leads to greater financial flexibility. Financial resilience and investing in personal attributes (reliability, integrity, courage and caring for others and yourself) loom large on the true balance sheet and are important for both personal goodwill and goodwill towards others in 2019. #IRL

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Filed under 12 Days of Christmas, Financial Wellness, For Love or Money, January Financial Tasks, Self Awareness

Back to School: D’s in Personal Finance

Let’s help you get 3 D’s in personal finance this month. As on Sesame Street, this post is brought to you by the letter D, because we’ve been trained since preschool to get A’s. Are you a personal finance slacker? This post is for you!

Get a D+ in Personal Finance here!

Get a D+ here!

Let’s consider these 3 D’s: Decluttering, Disaster and Discussion.

Decluttering

  • Three things you can do today! Financial decluttering- included here are things like unsubscribing from shopping site emails, from Groupon to  misleading requests for your bank account number or to “verify” your order from BigBoxCity.com Unsubscribe, delete and mark them as spam until they disappear.
  • Spreading the wealth is not always a good thing. Do you have multiple financial accounts spread around town, or the country? Do you still have an old 401(k) account with a former employer? If you had had a life changing event-did you change your beneficiary? Beneficiary choices always trump your will.
  • Are you still receiving multiple credit card or insurance offers?                                   You can stop them, you know.

Disaster Planning

  • What to have in the house in case you are stuck for 3-7 days, and what to take with you for an evacuation (say, for a wildfire or a hurricane)
  • You might think of your children first, or maybe not….Quick, what are the first three things or people you are going to grab? Start there and then add to the list throughout September, which is National Preparedness Month. #NatlPrep on Twitter
  • Practical digital tasks you can accomplish quickly. Load up an 8G flash drive on a lanyard with scanned important documents and photos-I got this tip from a friend who is a trained Urban Disaster Responder. Place in your disaster box or backpack.
  • Upload these same documents into your regular cloud storage.
  • Complete this handy document created by the Consumer Financial Protection Bureau of the US.
  • Actual cash somewhere ($10 in quarters, in case you find a working washing machine) and small denominated dollar bills. Remember the comedian David Brenner’s last wish here-“Bury me with $100 in dollar bills in case tipping is suggested at my final destination”.

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Old Habits & New Resolutions July Update

July can be a time to review those New Year’s Resolutions. Did you make any for 2018? 

Even if you didn’t,  now is a good time to revisit the subject, as the year still has five months to go!

cropped-new-dollar-bill-by-reuben-ingber.jpg

             Aauugghh!                                   Photo by Pixabay on Pexels.com

 

 

 

Often the calendar can help create structure for you. Bills get paid after payday; retirement plan contributions occur on paydays, etc. If you can itemize on your taxes, you may have dropped off many bags in the last week of December at your local thrift store. In my home town, Macklemore helped us out one year. Parents of college bound students have a date with the revised FAFSA; and by the end of January, you’ll have some thoughts about your past year’s tax return. For a quick read on what you can learn from your 2017 tax return from Morningstar, check here. Also, with that 2017 tax return near your screen, take a few minutes to run through a paycheck “checkup”. The IRS wants to help you with this, so you can withhold more in taxes if you need to, or loosen up those purse strings due to the increase in your standard deduction for 2018.

black calendar close up composition

 

 

As mentioned in a previous post, Fidelity and others generate helpful suggestions for our annual resolutions. One study indicates that financial resolutions are easier to keep than those about food or exercise.

Let’s begin with the one geared for success! Financial tasks and affirmative statements.

In five months you can:

  • Make 5 Roth IRA contributions
  • Set up and fund an emergency savings account with $500-$1000
  • Check all your accounts with beneficiaries- retirement, insurance and banking
  • Increase your charitable giving in order to get that company match or set aside funds for a non-profit, instead of the IRS.

What do you want to improve during the balance of 2018?

 

 

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Filed under Be Prepared, Financial Wellness, Habits, January Financial Tasks, Uncategorized

Intimidating: Opting In

Personal finance is intimidating for many people. While we all love to seek out media which is scary, from movies, books, TV, to live theater and other works of art, those are things we generally opt into. Personal finances are a complicated part of modern life and sometimes we feel as if we don’t have the tools to deal with the situations we find ourselves in.  Can you opt out? Sometimes not. 

I meet people who tell me that their own finances scare them. They find it daunting to sit down and confront their balance sheet, regardless of how many digits are to the left of the decimal point. Professionals bandy about words and phrases like tax burden, cash flow, budget and the scariest phrases of all,

“Where do you spend your money?”

“If you have an unexpected bill of between $400-$2,000, how will you pay for it?”

“Have you begun to save for your retirement?”

and in Seattle, “Do you want to buy a house?”

This can be enough to send you screaming from the scene, while nervously looking over your shoulder, while thinking “I never want to see THAT again!”

I read this article in The Atlantic this week, about how people live paycheck to paycheck, even as they live a middle-class life. The online comments were mean and full of blame. To be sure, there is shared and personal responsibility to be had. No, maybe the author shouldn’t have drained a 401 (k) to pay for a wedding; no, he shouldn’t have missed a writing deadline and had to pay back the advance, but let the person out who has never missed a deadline in her life cast that stone. I don’t qualify.

Financial advisors are here to help and support people to make good decisions about their cash, their future and their piece of mind. We also want to help you move forward from bad decisions you own, or which were forced upon you. I believe my job is to meet you where you are, and help chart the path forward. For you do need a path, a vision, or some goals; otherwise you are just looking at your feet, not where you need to travel.

IMG_1731

This path leads to a well-defended castle. Photo by Dana Twight

Opt out of the intimidation, and opt in to a new path for your finances. Collaboration might reduce the fear factor and even generate some satisfaction.

Zombies and Zinfandel: Handling Your Financial Monsters is tonight!

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Handling Your Financial Monsters

Join me behind the reinforced walls of Office Nomads for
a glass-in-hand look at financial monsters and how to OUTSMART them.

We all know that tackling our finances can take lots of preparation, and sometimes, a little wine to grease the wheels. So does the Zombie Apocalypse. That’s why I’m hosting a tax-season recovery event to turn you into a Financial Apocalypse Prepper – Zombies and Zinfandel.

Zombies and Zinfandel is Thursday, April 21, 2016

TFE.ZZ.Michael.Adrada.70391(1)

Come at 6:45 to mingle with other Zombie Fighters. Art courtesy of Michael Adrada

Together, we’ll talk about survival through planning (for your tax refund), creating strong safety nets (like managing credit), and the allies you’ll need (just as much as those fences) to preserve your resources.

Although this is a fun excuse to hop on the zombie zeitgeist bandwagon, it also strikes at the heart of my mission at Twight Financial Education – to empower clients to break through money taboos and meet your financial goals on your own terms. This is the third class in my wine series, after Mutual Funds and Merlot and Riesling and Retirement. Please pre-register here through Brown Paper Tickets.

Don’t like zinfandel? No problem – there will be some alternative beverages on hand.

This just in! Office Nomads is now accessible via light rail. The entrance to the Capitol Hill Station is 3-4 blocks from Office Nomads. Additional parking details at the event site.  Reserve your spot in the shelter before it’s too late!

Shoutouts

Thank you to my main collaborators Christopher Mathias, Andrea Carey, along with Casey Middaugh.  Seattle artist Michael Andrada designed the really cool poster you can see here.  Also to Chateau Diana (creator of Zombie Zin), who gave us some giveaways.

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Old Habits and New Resolutions

January 1-31 is traditionally a time of making [and breaking] New Year’s Resolutions. Is it  crowded at your gym? Apps and online tools abound. Books and blogs on decluttering, tidying and organizing can easily be found in your inbox. It is said by some that a habit takes at least 6 weeks to create and people such as Gretchen Rubin and Beth Dargis have multi-day programs on offer. Behavioral economist Dan Ariely created  a short program in this  blog post.     To see the results of his research, visit this link from WYNC.

PowerofHabit.book-cover

by Charles Duhigg

Often the calendar can help create structure for you. Bills get paid after payday; retirement plan contributions occur on paydays, etc. If you can itemize on your taxes, you may have dropped off bags in the last week of December at your local thrift store. In my home town, Macklemore helped us out one year. Parents of college bound students have a date with the revised FAFSA; and by the end of January, you’ll have some thoughts about your 2015 tax return. For a quick set of tax facts and limits from Morningstar, check here.

As mentioned in a previous post, Fidelity and others generate helpful suggestions for our annual resolutions. One study indicates that financial resolutions are easier to keep than those about food or exercise.

So let’s begin with the one geared for success! Financial tasks and affirmative statements. What do you want to improve in 2016?

Where to begin:

Meta Topics: There are meta topics, like what you learned from your family of origin about money, and if money represents the same thing to you and your partner (freedom or security for example).

Or

Nitty-Gritty Topics: There are also the nitty-gritty topics such as how to cut spending on meals out or groceries, am I saving enough for retirement,  and the ever popular  “am I spending too much on fill-in-the-blank ?”(e.g. coffee, furniture, clothing, wedding stuff, organic food, books).

This will be a series on how make the incremental changes which can be permanent, instead of the ‘cold turkey’, ‘all or nothing’ ‘you should do this’ framing which is [mostly] guaranteed to fail. Think of financial wellness, and small successes. Avoid binary thinking, see your progress on a continuum, and remember that like the stock market, it is time, not timing, which makes the difference. Ready, set…

wikimedia-16_1_go-sign

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Tax Planning

The Chinese economy is beyond our control but you can look ahead to your own tax season. Here is a great tax planning sheet from Morningstar to review now or set aside until March (if that is your routine). Remember that you can still send in estimated taxes-even if you missed doing so on January 15th (the day for 4th quarter 2015 estimated payments).

The Bait

Which method  gets you to work on your taxes – a carrot or a stick?

Small Business Links

Small steps to success will be a big theme for this blog in 2016. What can you do right now to be better prepared to do your taxes for 2015?

cropped-new-dollar-bill-by-reuben-ingber.jpg

It’s that time of year again!

Visit the IRS Small Business & Self Employed Division or the Small Business Administration (SBA) for tools to estimate your taxes.

Have you heard of SCORE? It’s a national organization dedicated to help for small business owners, whether you are just thinking about a business or have had one for several years. They have low cost classes, free webinars and centers all across the country. More information on their tax programs is available here.

 

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Filed under Be Prepared, January Financial Tasks

After Mutual Funds & Merlot

German wine humor postcard

German wine humor!

Mutual Funds and Merlot was so much fun last Friday. We drank a great Merlot from Columbia Crest (Grand Estates). Topics included your objectives for your investment funds and how those should match up to your mutual fund choices. We looked over the Vanguard portfolio allocation charts (seen here) from 1926-2014 to learn how asset allocation adds to or decreases average return.
One question asked,”what would it look like if the Depression (1930’s) years were left out”? Those years have the largest declines. Declines were pretty dramatic in 2008, a popular Standard and Poor’s 500 fund from Vanguard (VFINX) was down 37.02 that year. When looking at mutual funds returns now, be sure to check the ten year as well as the five year returns; as the 2008-2009 numbers have dropped out of the five year averages.

We also reviewed fees and terminology (no-load, load etc.) and I shared that when I began in this business (mid 1980’s) the highest front end mutual fund charges were 7.75%!

We did not cover all of the types of mutual funds; only open-ended mutual funds and index funds (a subset of open-ended funds). I also reviewed a decision tree of sorts:

  • Money to Invest (how long)
  • Tax Treatment (Taxable or non-taxable)
  • Diversification (individual issues or pool of securities e.g. mutual fund)
  • Objectives for your funds (growth, income, combination)

My next class will be Riesling and Retirement

(February 3, 2016)

2015-06-06.Winegrapes.blossoms.

German wine grapes in June 2015 by DCT

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