How to Best Help Your Aging Parents Avoid Financial Mistakes

Senior couple sitting on a wooden bench in the parkIf you’re concerned that your parents are getting older and worried about their ability to make wise financial decisions, you’re not alone. In fact, 10,000 experienced baby boomers are retiring each day – a trend that will continue through 20301. When you combine the complex and ever-changing financial industry with the fact that there will likely come a time your parents will be unable or uninterested in managing their money, you may very well find yourself in a challenging situation.

According to a poll by the Pew Research Center:

  • 75% of adults believe that they have a responsibility to provide financial assistance to their aging parents.
  • 63% percent of adults have given some type of financial support to their grown children in the past year.

As your parents move into retirement, it’s wise to plan ahead for any financial and legal responsibilities they may expect you to take on.

Starting the conversation
These days, 65 is hardly considered old age. But, it’s crucial to sit down with your parents and have an honest discussion about issues that may arise—before they need your help. What are their expectations for the future? What kind of assistance will they need from you? Will they have sufficient resources to cover their care as they age?

As part of this conversation, be sure their important documents and information are organized. You’ll want to know where to locate items such as:

  • Wills and legal documents
  • Investment, bank, and insurance account numbers
  • Safe deposit boxes, real estate deeds, and automobile titles
  • Emergency contact numbers (medical providers, neighbors and friends, and financial, tax, and legal advisors)

Looking into legal matters
If they haven’t already done so, your parents may want to hire an attorney to help them manage their affairs. For example, they may need assistance with:

  • Appointing a health care representative. Without legal authorization, medical privacy laws prevent doctors from discussing a parent’s medical conditions with you. In addition to appointing a health care power of attorney, your parents may want to consider a living will, which provides instructions on how to manage treatment if they have a terminal or irreversible condition and cannot communicate.
  • Reviewing and updating estate planning documents. Besides the basic estate planning documents, such as wills, durable powers of attorney, and revocable trusts, your parents may wish to draft a letter outlining who will receive personal effects like jewelry and family heirlooms.

Discussing their financial situation
Depending on your parents’ circumstances and financial savvy, they might need help managing their money as they age. Making arrangements now can help prevent confusion down the road.

  • Review insurance coverage. Be sure to discuss your parents’ existing life and long-term care policies, and make changes if necessary.
  • Enlist an advisor. Now may be a good time to get to know your parents’ financial advisor, or to talk to your own advisor about your parents’ situation. She can recommend products that are suitable to their investment goals, whether that means income, capital preservation, or growth.

Looking to the future
As your parents age, a number of other considerations will likely come into play. Will they be able to continue living at home? How long will they be able to drive? Although these topics may be difficult to discuss, it’s important to start the conversation early—for your parents’ sake as well as your own. By planning ahead, you’ll help ensure that everyone’s needs are met.

And remember, you don’t need to make these decisions alone. I’m happy to help support you and your parents with strategic planning for the next phase of their lives.

1 Source: Trends in Executive Development 2016 report, Executive Development Associates

*This content originally appeared in the February issue of Hills & Castles magazine.

What are 5 Expert Tips I Need to Know to Help Me Retire?

Top 5 Concept Clipped Cards and LightsLast week, I called a long-time client to ask how he was feeling considering it was the first day of his retirement after working 42 years. He was obviously overwhelmed with excitement! I’ve made this call dozens of times over my career and it’s always exhilarating to share in the joy that comes when my clients enter the retirement phase of life. It’s no wonder the number one question I’m asked as a financial advisor is, “How do I turn my retirement dreams into a reality?”

In 2018, I challenge you to consider these five action steps that can help improve your chances of retirement success:

1. Review your savings. I believe the biggest reason people won’t be able to retire is because they don’t save enough. If you have access to an employer-sponsored retirement plan, you should be using it to your advantage. In 2018, the IRS will allow you to save $18,500 into a 401(k) or 403(b) plan – that’s $500 more than last year. If you are age 50 or older, you also have the ability to make an additional $6,000 catch-up contribution into your 401(k) or 403(b) plan in 2018. If your employer matches your contributions, don’t miss out on money that is essentially “free” to you just for participating. Even a small increase in your savings rate now can make a big difference later.

2. Review your lifestyle and retirement progress. It’s essential to know where your money goes if you want to get out of debt, spend less, or save more. Consider reviewing your spending habits using a free online tool such as Once you know your living expenses, you can access tools available on your retirement plan’s website or work with a professional to determine whether you have a retirement gap you need to fill. Knowledge is power and knowing where you stand today is the key to making progress.

3. Review and rebalance investments. If you don’t check your retirement account at least twice a year, you could be making a huge mistake. As you get closer to retirement, you should check it more often. You should consider whether you are taking an appropriate amount of risk and if your investment allocation matches the amount of risk you are comfortable taking. For instance, markets have performed very well recently. Because of this, a portfolio that was once divided evenly between stocks (typically aggressive) and bonds (historically more conservative) could have become unbalanced as the stock portion has grown rapidly. If you do not rebalance back to your original allocation on a frequent basis, your account may become too aggressive. Keep in mind that many employer-sponsored retirement plans offer “do it for me” investment options that will help manage your risk and investment strategy for you.

4. Determine an appropriate withdrawal strategy. Having a defined investment distribution strategy is important in order to avoid outliving your assets. Even after you retire you may consider postponing certain types of withdrawals to help boost the long-term income power of your tax-advantaged accounts. You may want to tap your taxable investments first and postpone withdrawals from your workplace retirement plans and traditional IRAs for as long as you can – up to age 70 ½. Keep in mind that today’s lifespans and retirements last longer than they used to.

5. Don’t go it alone. Even when the market performs well, your emotions can get in the way of making good decisions. A qualified financial advisor has the knowledge and expertise to help you stay on track, regardless of what’s going on in the markets. Coaching and support from an experienced professional can provide valuable perspective and help you make decisions with confidence.

If you would like an independent perspective of what you could be doing better to plan for retirement, let me know. I’d love to make a phone call one day to ask you how your first day of retirement feels!

*Diversification does not ensure a profit or protect against a loss.

**This content originally appeared in the January issue of Hills & Castles magazine.

How to Invest Your Money in 2018 that Will Help Boost Your Confidence

Coin in jar with wood number year 2018, Concept save money and investment new yearWith the stock market continually setting new all-time highs, I’ve noticed quite a euphoria when talking investments with people. It’s as if everyone is saying, “I’ve finally got my investment strategy all figured out!” As a thirteen-year investment advisory veteran, I recognize the underlying phenomenon that’s at play here – it’s easy to make money when markets are good! The flip side, however, is that it’s hard to keep from losing money when markets are bad. We are certainly seeing more risk in the markets than ever before and that raises two questions: (1) is the risk of a stock market correction immediate and (2) how should money be positioned going forward?

Let’s use a simple baseball analogy. When you think about your own personal investment strategy, are you trying to hit homeruns or are you just trying to hit steady base hits? What’s your plan to win the game? Whatever your tactic, you should always know how much risk you are actually taking when you invest. You may think you’re an aggressive investor, but when you consider the dollar value your portfolio would have dropped during the past eight market corrections, you might not feel so aggressive. Or, you may want to take a more moderate approach, yet your portfolio isn’t strategic enough to give you a balanced combination of growth and protection. So, how can you be confident that your money is positioned appropriately going into the new year?

  1. Look at current market conditions. Right now, our economy seems to be stable so normal investment strategies tend to work. Consumers and businesses are confident. The housing market is still growing. Most every major economic indicator is in healthy territory. One factor to watch, however, is employment growth. We are running out of workers and if this trend continues, we might see the economy grind to a halt. But even from a technical standpoint, there is a lot of momentum behind this market that seems to suggest it will continue to move higher.
  2. Consider risks in the market today. As I write this article, companies are generally overvalued. This means that an investor can expect to pay higher prices for stocks in today’s market than they may be worth. There’s only been one other time in history when valuations were higher. But what’s more concerning is the amount of borrowed money (we call this “margin debt”) that is being invested in the market. Margin debt is it all-time highs. Consider this in conjunction with potential interest rate hikes, as well as our current geopolitical landscape, and use this information to choose an appropriate risk level.
  3. Think about overweighting sectors that are expected to do well over the next 12-36 months and underweighting areas that may underperform. When you think about all the major places you can allocate money, it’s important to diversify without diversifying to mediocrity. Consider where money is flowing and which sectors have the best prospects for growth.
  4. Don’t underestimate the role an investment advisor can play in keeping you on-track. Whether you are too busy to do it yourself or you just need someone to help you take a more tactical approach, a qualified advisor can help you avoid making mistakes. If all you do is open your monthly statements and look at whether the value went up or down, you probably need to pay a bit more attention. On the contrary, if your current advisor doesn’t proactively communicate with you, you may need to consider someone who will. You work hard for every penny and you need to know that someone is working hard for you.

This content originally appeared in the December issue of Hills & Castles magazine. 

The Remarkable Way Compartmentalizing Leads to Energy and Focus

Woman legs in different shoesTwo years after having my first child I stumbled upon a game-changing habit that changed the way I was able to focus on being a mom and running my businesses. Like many working business-owners and moms, I face tremendous stressors on a daily basis – pressure from others, guilt, trials with people, the mythical idea that I need to find balance in my life, deadlines, juggling, and problems that are seemly impossible to solve. I’m often asked, “how do you do it all at once?” And I sometimes think it’s funny how simple this little tip is, yet how much of a difference it makes in my life. The crazy thing is that anyone, including you, can apply it to your life and see the same results.

The key is learning to compartmentalize, a psychological trick you can play on your brain to yield short-term results. The more you master this short-term strategy, the better positive results you can see in the long-run. When you compartmentalize, you are intentionally dividing your thoughts so that you can conquer what’s in front of you. Here’s an example: I’ve found that I do a pretty lackluster job of running a business and being “mommy” all at the same time. A few years back I distinctively recall an evening when I was cooking dinner while my children were running wild around the house, destroying the place and acting like crazies, and my mind was on a work problem the entire time. It’s like I just checked-out and I don’t recall anything about this evening other than the moment I recognized what was happening and I asked myself, “how is this fair to my children – or to my clients for that matter?” During this phase of my life, I felt like I was doing a mediocre job serving everyone and I didn’t have anything exceptional to offer a single person. And that’s when I accidentally stumbled upon this trick.

Fast forward a few years and, today, I have learned to sit in my car for a few short minutes and decompress from my day. I consciously turn off my “business” mind and flip on my “momma” switch. I ask myself to list the challenges that are lingering in my head and choose to put them on the shelf for the next morning. I make a plan in my head for how I will hit the ground running first thing the next day so that I can tackle those tasks. And then, I ask myself to recall my priorities for life. Like a broken record each day, I list in order what I need to focus on before walking through my front door. It typically goes something like this, “My husband is first. What can I do for him tonight to help him out? My kids need to eat dinner. We have reading homework to do. They need to know I missed them today and that they have my full attention. I need to straighten up the house and put away the serving dishes from the birthday party last weekend before the kids break them. And don’t neglect the fact, Valerie, that your entire evening needs to be centered around serving and obeying God.” It’s like magic! It’s like I enter a different realm of thinking and I become calm, cool, and collected.

There are a tremendous number of situations where you can use compartmentalization as a tool. I’m sure this isn’t your first time to hear about it. But a word to the wise, compartmentalizing can have a negative effect if you aren’t fully aware of how you use it as a tool. Think about soldiers who use this strategy in combat to push-out trauma. If they don’t intentionally return to face their fears, they can experience PTSD later in life. I’m obviously no psychologist, but I’ve personally found you have to be just as deliberate in your routine the next day or your business challenges that you’ve turned off will become bigger problems later on if you choose to ignore them.

So my routine the next morning is just as important, I get in my car and make a mental note of where I need to pick-up with my family before I walk through the door in the evening. And then I return to my work priorities and get my game-plan together for the day, all before pulling out of my driveway.

I’ve also become intentional about breaking during the day to handle personal matters. Outside of emergencies, I’ve challenged myself to set aside a specific and sufficient amount of time for me to flip the switch when I need to switch gears. Whether it’s at the end of the day and I can make a clean break or it’s smack dab in the middle, I’ve learned that I can only focus on one thing at a time if I want to do it really well.

This is just one of many tips I like to share with my clients. If you are looking for a financial advisor that thinks outside the box and truly wants to make a difference in your life, I’d love to have a conversation with you. Call or e-mail me today!

3 Timely Ways to Embrace Thanksgiving with Your Money

Give thanks lettering. Letterpress inspired greeting card with cAs you pause this Thanksgiving to express your gratitude for life’s blessings, it’s a great time to consider ways to give back to the world around you. From a financial standpoint, it’s also a terrific time to take advantage of charitable gifting strategies and make the most of your tax planning before 2017 draws to a close. Here are 3 things you may want to consider before the end-of-the-year:

  1. Give stock instead of cash. If you own a stock that has appreciated in value and would be taxable when sold, consider donating the stock (or a portion of it) directly to your charitable organization to potentially save on taxes. You may get a tax deduction based on the fair market value of the stock at the time of the gift and the charity can sell the stock without paying taxes. This can also help you diversify your investment portfolio. So, before you think about liquidating money from your investment portfolio to free-up cash that you’ll be giving on an after-tax basis, you may want to look closely at any gains you have and transfer the stock directly. The charitable organization will be able to give you instructions on how to make the transfer.
  2. Use your Required Minimum Distribution to your Advantage. If you’re 70½ years old and subject to mandatory withdrawals from your Traditional, Inherited, or Roth IRA, recent legislation now allows you to make tax-free distributions from your account directly to a qualified charity. How does this benefit you? As long as certain rules are followed, the direct transfer may allow you to save on taxes because the amount would be excluded from your gross income calculation. This tax-saving strategy can be especially helpful for people who are already giving or planning to give to a charity and for those who don’t itemize deductions on their income tax return.
  3. Make cash gifts before the end-of-the-year. Depending on your specific tax situation, charitable donations could provide a good source of income tax deductions. In order to deduct a charitable contribution, you must itemize your taxes. This is critical, especially since the IRS reports that only 30% of taxpayers choose to itemize deductions on their tax returns. It may be worth spending time identifying other deductible expenses to see if you can exceed the standard deduction that most Americans take. It’s also a good idea to make sure you research whether your charity of choice is a qualified tax-exempt organization.

These are just a few ideas that combine charitable gifting and tax planning strategies, but there are many more. Let me know if you’d like to have a conversation about how you can include giving in your financial plan.

Happy Thanksgiving from The Leonard Family to yours!

*This post originally appeared in the November issue of Hills & Castles magazine. 

Trick or Treat: 3 Crazy Ways Your Brain Tricks You Into Not Saving Money

Pumpkins on grey backgroundDid you know your brain may be to blame for preventing you from reaching your financial goals? It’s true. Several recent studies conducted by Prudential suggest that we should train our brains to think differently about money because our brains are tricking us every day. Here’s how:

  1. What would happen if you asked a stranger to donate to your retirement fund? They’d probably laugh at you. But, research suggests when we think about our older selves in retirement, we see ourselves as strangers and have a hard time saving for something we can’t easily envision. For example, when we think about ourselves now, our medial prefrontal cortex reacts strongly, yet when we think about a stranger, the same area has a lesser reaction. Oddly enough, this section of our brain has the same insignificant reaction when we think about ourselves in the future. To make saving easier, we need to find ways to connect with the person we want to become so it doesn’t feel like we’re giving money to a person we don’t know.
  2. Have you ever lost a $20 bill? It hurt, didn’t it? Did you know that our brains recognize physical pain and losing money in the same way? Furthermore, the same area of our brain that reacts when you lose money is responsible for reactions related to saving money. It’s almost as if we feel like we’re losing money when we save. Ouch. That hurts. But consider this – what if we woke up one day and checked our bank account to find we had a lot more money than we originally saved? How would this make you feel? Personally, I’d be doing a happy dance! This means we need to start focusing harder on the gratifying feelings that savings can lead to instead of the pain we feel when saving today.
  3. You work extremely hard. So, why are you behind in reaching your financial goals? The area of your brain that helps you make responsible decisions, your dorsolateral prefrontal cortex, is focused on overriding the parts of your brain that encourage you to make impulsive decisions. Because your responsible side gets tired from all the decisions it makes every day, the impulsive side often overrides it. This leads to procrastination. Big surprise, huh? You’re tired! The last thing you want to do after coming home from a long day is to calculate your retirement gap or figure out the best way to invest your money. So, what can you do to prevent procrastination? Get an accountability partner!

One of the most important ways to help bridge the gap between where you are today and where you want to be is to find someone who can understand your goals, help simplify the decisions you need to make by offering you easy solutions, and keep you on track when life gets in the way. I’d love to help you get from here to there. Feel free to reach out to me if you’re ready to get focused.

*Originally published in the October issue of Hills & Castles magazine. 

3 Urgent Reasons Mom Should Get More Life Insurance

Family umbrella protectionYou wouldn’t believe the number of times I’ve heard families say, “mom doesn’t need as much life insurance as dad because she is a stay-at-home mom” or because “she’s not the primary breadwinner.” In my thirteen years as a financial advisor, I’ve seen too many instances where families are financially devastated by this misunderstood notion. The fact is that many times you can insure mom for a minimal cost, while protecting your family from financial hardship. Here’s why you should consider life insurance for mom right away:

1. Mom is worth more than you think! According to a 2016 “Mom Salary” survey by, today’s stay-at-home mom is worth $143,102 per year when you consider her hours worked and the amount of comparable compensation received by people doing similar jobs. Not only does mom fill the role of janitor, taxi driver, accountant, academic advisor, nutritionist, and at least 26 other official job titles, but she works about 92 hours per week.

You can’t underestimate the amount it would take to replace mom if she were no longer around. As terrible as that is to think about, indicates the average father in Alabama would spend $15.85 per hour to hire someone to help replace her. That’s nearly $33,000 per year which only factors in childcare, not household chores or anything else mom does!  Depending on the age of your children, the total price tag for childcare could add up to almost $800,000. That’s reason enough to make sure she’s covered.

2. Life insurance replaces income. Women who work outside the home provide valuable financial support for their families. A loss of that income could certainly impact surviving family members’ ability to maintain their current standard of living or her spouse’s ability to retire if mom’s income can no longer be saved for the future.

3. Who wants to leave debt to their loved ones? Most families have a mortgage, two car payments, and credit card debt. Putting the pieces of life back together after the death of a mom is hard enough without financial woes. Life insurance can be a cost-effective way of making sure families aren’t burdened with debt and are setup for future financial success.

It’s definitely not a fun topic to think about, but it’s necessary. I’d like to help you start the conversation and determine how much insurance you need. Feel free to reach out to me if you need an independent life or long-term care insurance specialist to help you protect your family.

Originally published in the September 2017 issue of Hills & Castles magazine.