Financial Planning

Health Trends and Long-Term Planning Needs

McCann-WEBLife expectancy and health trends are constantly evolving. Recent data from the Alzheimer’s Association validate why financial planning is more important than ever. Keep reading to learn how health trends and long-term planning needs go hand in hand.

Deaths from Alzheimer’s more than doubled between 2000 and 2019, while those from heart disease decreased. Alzheimer’s kills more people than breast cancer and prostate cancer combined. Progression is slow and can be uncertain. People age 65 and older survive an average of four to eight years after a diagnosis of Alzheimer’s, though some live as long as 20 years.

Preparing for long-term care is an important part of your financial planning process. After diagnosis of a serious illness, your options become more limited.

Alzheimer’s and other forms of dementia take a devastating toll – not just on those with the disease, but on entire families. Research shows that millions of care contributors make enormous personal financial sacrifices every day, including cutting back on important necessities for themselves and their families.

About 80 percent of the help provided to older adults in the United States comes from family, friends, or other unpaid caregivers. About 25 percent of dementia caregivers are “sandwich generation” caregivers, meaning they care for both an aging parent and at least one child.

Many people have misconceptions about what expenses Medicare and Medicaid cover, leaving them unprepared to handle the tremendous costs associated with the disease. An Alzheimer’s Association survey found 13 percent sold personal belongings, such as a car, to help pay for costs related to dementia. Nearly half tapped into savings or retirement funds, and 11 percent cut back on spending for their children’s education.

It doesn’t have to be that way.

There are a variety planning options that can help preserve your income and investments, while ensuring you and your loved ones will not have to sacrifice quality care or basic life necessities in the event of a long-term illness. Your advisor can help you explore and understand those options, and develop a plan that fits your needs.

Women Celebrating BirthdayLiving with Alzheimer’s

♦ An estimated 6.5 million Americans are living with Alzheimer’s; two-thirds are women.

♦ African-Americans are about two times more likely to have Alzheimer’s than Whites; Hispanics are one and one-half times more likely.

♦ People living with Alzheimer’s or other dementias have more skilled nursing facility stays, more home health care visits, and twice as many hospital stays per year as other older people.

Source: Alzheimer’s Association
By |2022-06-06T15:36:31-07:00May 9th, 2022|Financial Planning, Health Care, Insurance|

Teaching Kids Money Concepts

teaching kids money conceptsTeaching kids money concepts is easier with The Four Money Bears. A book review by Patrick Eng.

I was recently introduced to a book called The Four Money Bears, by Mac Gardner, a Certified Financial Planner practitioner based in Tampa, Florida.  He created it to help teach youngsters (ages 5 to 10 years) about money. It’s a charming story, and a great way to begin money conversations in any family. Grandparents can read this book to their grandkids, and parents can use it to introduce financial concepts to their children at an early age.

Gardner uses the four money bears – Spender Bear, Saver Bear, Investor Bear and Giver Bear – to teach kids about the four primary functions of money. Each has their own strengths and weaknesses; and, as such, they cannot be successful on their own. By working together to create a game plan (budget), they can all be successful.

Reading the book as a family is a great way to discuss the many uses of money and learn how to view each in a healthy way. You can go online at www.teachkids.money to learn more.

Teaching kids money concepts with The Four Money Bears.

The Four Money Bear Rules:

  1. Spend Cautiously
  2. Save Diligently
  3. Invest Wisely
  4. Give Generously
By |2022-01-13T09:02:20-07:00January 31st, 2022|Books, Financial Planning|

Your Investment Policy Statement

Have you ever wondered why we at Perspective Financial Services have annual reviews and discussions about your Investment Policy Statement (IPS)? A well-written, up-to-date IPS is a powerful communication and planning tool, with three key benefits:

  1. It allows you and your advisor to discuss and document your goals, as well as your tolerance for investment risk, to create an effective investment strategy and asset allocation.
  2. It helps clarify how and why your portfolio’s investment mix determines its performance over the long-term. (The chart below offers a good visual regarding why asset allocation is so important.)
  3. It enables you and your advisor to periodically re-visit your goals and strategy, to ensure they remain appropriate to changes in your life and needs.

An Investment Policy Statement (IPS) is a document prepared by an investment manager and their client. It states the goals and the strategy for how to reach those goals through a specific investment mix agreed upon by the client and the investment manager. It’s prevalent within the institutional investment management space and is becoming more so at the individual or retail level. Perspective Financial Services has utilized the IPS for its clients since Mike McCann founded the firm in 2003.

Your Investment Policy StatementCall or email your advisor if you have any thoughts or questions about your IPS. We’re happy to go over it with you any time.

 

By |2021-12-02T14:05:37-07:00January 3rd, 2022|Financial Planning, Investing|

Shifting Priorities and Changing Plans

Shifting priorities and changing plansPivot. Fans of the television show Friends may always get a chuckle from that word. For many, however, it now represents a strategy for dealing with life in a post-Covid world. Shifting priorities and changing plans have been dubbed the “new normal” and it can be pretty stressful.

Yet, change doesn’t have to be random and scary. With the right preparation and planning, unexpected change can be manageable and intentional shifts in direction can be exciting.

The Covid lockdown became a time of self-reflection, evaluating priorities, and taking stock in careers. Some people found themselves out of work, while others gained a new sense of pride in their jobs when they were deemed “essential” for the first time.

Many of us adapted to working from home. We attended online meetings with kids clambering on the sidelines, conducted business while the dog barked at the Amazon delivery person, or focused on tasks with a quiet home as the backdrop. Some learned to enjoy it, others found it maddening. The idea of work-life balance took on new meaning.

Roughly 20 months into this radical shake-up of our lives, many people are seeing new opportunity, a chance to pivot with purpose – to reboot our lives, go back to school, start a family, change careers, retire early. The highest pay or the fastest path to promotion may be lower on the list of priorities. Flexibility, family-friendly policies and mental health care benefits are in higher demand.

If you’re experiencing a major life change or shift in priorities, talk with your financial planner. Any adjustment in your short-term and long-term personal plans and goals will impact your short-term and long-term financial situation. Areas to consider include:

  • Changes to current income and expenses;
  • Adjustments to savings and investments;
  • Emergency-fund needs;
  • Retirement and education account funding; and
  • Compatibility of your risk tolerance with your overall goals and needs.

A pivot in life, whether voluntary or forced, can be an opportunity. Make the most of it. We’re here to help.

By |2021-12-02T13:49:36-07:00December 20th, 2021|Current Affairs, Financial Planning|

An Eye on Inflation

an eye on inflationBy most measures, the economy is running hot. But even the casual observer can’t help but notice a strong economy can come with a down-side. Inflation is becoming more and more obvious, as we fill our gas tanks and are alarmed by higher prices of everyday items like groceries. Inflation had been for many years an afterthought, but now it is getting more mainstream attention as we all keep an eye on inflation.

The U.S. Bureau of Economic Analysis’s August reading of the core personal consumption expenditures (PCE) price index — the Fed’s preferred inflation measure — was up nearly 4 percent year over year, the highest inflation in three decades. September’s consumer price index, the more familiar CPI, rose 5.4 percent compared to a year ago.

The price of many basic family goods is up much more than that. For households earning the U.S. median annual income of about $70,000, the current inflation rate has forced them to spend another $175 a month on food, fuel, and housing, according to Mark Zandi, chief economist at Moody’s Analytics.

It’s causing many to ask if inflation will stay elevated or head back down toward the long-term trend. Economic analysts at The Vanguard Group believe inflation dynamics will be volatile in the short-term. This is mostly due to supply shortages and other economic disruptions caused by virus-related shutdowns and the subsequent re-opening. However, Vanguard believes by the end of 2022 inflation will decline back to the 2.5 percent neighborhood.

What can we do to control inflation? The answer is, of course, not much.

You can improve your odds of long-term financial success, though, by working with the right advisor. An independent, fiduciary advisor, like Perspective Financial Services, will help you map-out, document, and stick to a disciplined plan to get you through uncertain times.

By |2021-11-09T08:38:28-07:00November 22nd, 2021|Current Affairs, Financial Planning|