Elder Financial Abuse Elder financial abuse is a growing national problem, costing victims an estimated $2.6 billion annually. Shockingly, half of Americans over age 65 show signs of financial abuse, which can include unnecessary services, excessive fees, stolen checks, and even family members withdrawing money without consent. Ric emphasized the importance of adult children monitoring their parents’ finances, discussing estate planning, and obtaining power of attorney to safeguard against abuse. Five signs of financial abuse were outlined: unnecessary purchases, unexplained disappearance of money or possessions, unpaid bills, large withdrawals, and individuals exerting excessive control over elderly parents. If you suspect abuse, contact law enforcement, adult protection services, or the National Center for Elder Abuse.

Graduate School Debt and Career Planning The financial implications of graduate school debt can be staggering, and Ric cautioned parents against allowing their children to incur six-figure debt without understanding its long-term impact. He advised having serious career conversations with children to ensure their education aligns with future income potential and specialty areas that generate sufficient earnings. Strategies to minimize debt include scholarships, employer-sponsored education programs, and military service in exchange for tuition coverage. Ric stressed the importance of viewing education as an investment in a child’s future and evaluating whether the cost of the degree is justified by the career benefits.

Insurance Needs and Financial Protection Insurance is a cornerstone of financial planning, not for wealth creation but for financial protection. Ric outlined key types of insurance, including disability insurance to protect income, life insurance for dependents, auto insurance, health insurance, and long-term care insurance. Statistics show that one out of two Americans over 65 will need long-term care, with costs averaging $7,000 per month or $84,000 per year. Ric advised purchasing the minimum necessary insurance to cover potential losses and emphasized analyzing risks and financial implications.

401(k) Plans and Retirement Savings Dallas Salisbury, CEO of the Employee Benefit Research Institute (EBRI), shared insights on 401(k) plans, noting the average balance in the U.S. is $67,000, while individuals who have contributed for 30 years average just under $200,000. Ric and Dallas emphasized the need for early and consistent saving, highlighting the importance of educating individuals about saving at home, school, and the workplace. Automatic enrollment and contribution escalation in 401(k) plans were discussed as effective strategies to encourage saving, along with pre-diversified investment options to simplify decision-making. Ric stressed that saving for retirement is a personal responsibility, and individuals must actively choose to save to avoid financial shortfalls.

Consumer Behavior and Saving Challenges While many recognize the need to save, instant gratification and impulse buying often derail financial goals. Surveys show that most individuals could afford to save an extra $25 to $75 per week but fail to prioritize it due to lifestyle choices and advertising promoting immediate enjoyment. Ric and Dallas discussed initiatives like America Saves Week and Choose to Save campaigns, which aim to educate and motivate individuals to save for their financial future. Tools such as financial planning checkups and public service announcements were highlighted as resources to help individuals understand their financial situation and make informed decisions.

Medicare and Retiree Health Care Costs Medicare covers only 64% of health care costs for retirees, leaving individuals responsible for nearly 20% of expenses, with private insurance and government programs covering the rest. Ric warned that these out-of-pocket costs could amount to hundreds of thousands of dollars for retirees and their spouses, making it essential to factor health care costs into financial planning. Proper planning can prevent financial strain during retirement.

Market Volatility and Investment Strategy When it comes to setting sell orders on 401(k) retirement funds based on market predictions, Ric advised against this strategy. Timing the market is incredibly challenging, and short-term performance often has little impact on long-term investing success. He emphasized diversification as a protective measure against losses and warned against emotional reactions to market volatility, which can lead to poor financial decisions. Staying invested through market ups and downs generally leads to better outcomes than trying to predict and react to market swings.

All information provided is for educational purposes only and does not constitute investment, legal or tax advice; an offer to buy or sell any security or insurance product; or an endorsement of any third party or such third party’s views. The information contained herein has been obtained from sources we believe to be reliable but is not guaranteed as to its accuracy or completeness. Whenever there are hyperlinks to third-party content, this information is intended to provide additional perspective and should not be construed as an endorsement of any services, products, guidance, individuals or points of view outside Edelman Financial Engines. All examples are hypothetical and for illustrative purposes only. Please contact us for more complete information based on your personal circumstances and to obtain personal individual investment advice.

Neither Edelman Financial Engines nor its affiliates offer tax or legal advice. Interested parties are strongly encouraged to seek advice from qualified tax and/or legal experts regarding the best options for your particular circumstances.

The post Financial Planning, Elder Financial Abuse, and Protecting Your Wealth appeared first on ROI TV.

Intuition Bias and Financial Decision-Making Intuition bias often leads to incorrect financial decisions. I shared the example of the coffee and muffin cost problem, where many people incorrectly assume the muffin costs 10 cents instead of the correct answer of 5 cents. He emphasized that financial decisions often require precise math, which many people struggle with, leading to costly mistakes like under-saving for retirement or missing out on employer-matched contributions. Rely less on gut feelings and more on calculated planning.

Grandparents’ Financial Support for Grandchildren I also addressed questions about saving for grandchildren’s futures, covering two main options: college planning and retirement planning. Stressing the importance of fairness among grandchildren and avoiding financial gifts that compromise personal financial security. I recommend consulting a financial advisor to ensure contributions are affordable and effective.

Long-Term Care Insurance and Pre-Existing Conditions Long-term care insurance is a necessity, especially as one in two Americans over 65 will need it, with average costs of $250 per day. He recommended buying insurance while still healthy since premiums are lower, and highlighted that pre-existing conditions like heart issues may not disqualify applicants.

Mortgage Strategy: Long-Term vs. Paying Off Early I advocate for carrying long-term mortgages to maintain liquidity. Longer terms reduce monthly payments, improving cash flow, while paying off a mortgage early ties up cash and can be risky in emergencies.

Medicare Tax on Investment Income The 3.8% Medicare tax on investment income for high earners, noting its impact on real estate and stock sales. He encouraged understanding the tax’s implications to better strategize investments.

U.S. Government Debt and Economic Implications I interviewed David Walker, who highlighted the unsustainable federal debt and its economic risks. Walker called for fiscal responsibility, international investments, and inflation-hedged portfolios.

Financial Planning and Happiness Financial planning is directly linked to happiness, as it provides peace of mind and confidence in one’s financial future.

All information provided is for educational purposes only and does not constitute investment, legal or tax advice; an offer to buy or sell any security or insurance product; or an endorsement of any third party or such third party’s views. The information contained herein has been obtained from sources we believe to be reliable but is not guaranteed as to its accuracy or completeness. Whenever there are hyperlinks to third-party content, this information is intended to provide additional perspective and should not be construed as an endorsement of any services, products, guidance, individuals or points of view outside Edelman Financial Engines. All examples are hypothetical and for illustrative purposes only. Please contact us for more complete information based on your personal circumstances and to obtain personal individual investment advice.

Neither Edelman Financial Engines nor its affiliates offer tax or legal advice. Interested parties are strongly encouraged to seek advice from qualified tax and/or legal experts regarding the best options for your particular circumstances.

The post Making Smart Financial Decisions appeared first on ROI TV.