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Grandparents Offer Great Amounts of Financial Assistance

September 12, which just passed, is National Grandparents Day. In addition to the love and emotional support that grandparents provide, many also offer financial support. And, in some cases, grandparents are actually raising their grandchildren. There is food for thought for all family members when it comes to the financial assistance that grandparents provide and the financial help that some grandparents might need.

A 2019 article from AARP said that a survey the organization conducted found that despite the fact that close to 94% of grandparents give money to help grandchildren, “Today’s grandparents do not consider themselves financial supporters of their grandchildren…” AARP found that average grandparents in the U.S. at that time spent $2562 each year on grandchildren. In total, AARP calculated grandparent spending to be around $179 billion annually. That is a huge amount of money that makes a difference in the lives of their grandchildren.

Grandparent pending can vary. Some grandparents are buying gifts, paying tuition, and spending money to visit their grandchildren. Others may be providing basic necessities or actually acting as primary caregivers. MoneyGeek offers information on “Support for Grandparents Raising Grandchildren“.

Even those that are not primary caregivers may still give of their time by offering before and after school care and date night babysitting. There is likely no way to calculate how much parents save when grandparents spend time caring for grandchildren but given the ever-increasing cost of childcare, the figure is probably quite large.

Just like parents, grandparents should think carefully about going into debt or raiding their retirement funds to offer financial assistance.

Another way that grandparents offer financial assistance is via estate planning. Grandparents may leave money, real estate, IRA funds, businesses, and stock to any of their heirs, including grandchildren. A Fee-Only financial planner can’t help with babysitting, but you can consult with one assist about estate planning. 

Millions of Women Are Leaving the Workforce

Photo by The Creative Exchange on Unsplash

While people still relaxed from their labors and enjoyed themselves during the recent Labor Day holiday, many of us might say that the world of work has certainly changed, particularly for women. The article “Millions Of Women Haven’t Rejoined The Workforce — And May Not Anytime Soon” points out that not only have record number of women lost jobs, record numbers of women are also not likely to rejoin the workforce right away.

In an article designed to give employers tips about how they can win back and retain women who left the workforce during the pandemic, notes, “Gender inequities were holding women back in the workplace well before the pandemic began in early 2020…” Women are feeling increased pressure from having more to do at work and at home. And sometimes even remote work does not alleviate work-related stress: the Deloitte Global report Women @ Work: A Global Outlook found that many women said their employers did not encourage work-life balance and that they still experience “noninclusive” behaviors even while working remotely. (Noninclusive behaviors includes things like inappropriate jokes and unwelcome critiques.)

The online audio version of the NPR article observes that while caregiving responsibilities are seen as the primary reason that women leave and stay out of the workforce, Stephanie Aaronson of the Brookings Institution says it is more “complicated” than that. She thinks that in addition to caregiving responsibilities, people are reevaluating their lives, and some are deciding they do not want to spend their time working the same way they had been before the pandemic.

If you find yourself without work or contemplating the idea of leaving your job, consider getting help from a Fee-Only Financial Planner instead of just winging it. You can use expert financial planning help as you enter the next phase of your life.

Tips for A Fruitful Retirement

Photo by Kamala Saraswathi on Unsplash

We like to offer different perspectives on money management, budgeting, and retirement planning so it is evident that there is more than one way to plan your spending and saving. However, if you want a truly personalized financial planning outlook, contact a Fee-Only financial planner.

In a article, Jim DeGaetano, author of The Fruitful Retirement: A Financial Framework for Your Life’s Greatest Chapter, offers a retirement planning system that involves food. DeGaetano asks readers to think of retirement in terms of a triangle that is divided into three parts: Needs, Wants, and Legacy. The Needs portion makes up the bottom of the triangle since everything else rests on being able to meet basic needs. Wants are in the middle and the very top of the triangle is for Legacy.

In this plan, you consider this triangle in terms of fruit that represent each section. Pears (wide at the bottom) represent Needs, Apples (widest in the middle) represent Wants, and Strawberries (widest on the top) represent Legacy. You choose your fruit based on the area where you need the most financial assistance.

Strawberries are in the best position because their needs and wants are covered and they just have to find ways to leave the legacy they want.

Apples have the resources to cover their needs and that is important; what they lack is the ability to cover their Wants. To make the most of their life after they retire, they need to consider how to fund the lifestyle they are used to or envision. The article suggests that Apples might consider how they can do this through their investments.

Pears have the most work to do since they do not want to run out of money during retirement. A Pear may think about working beyond the first year they can retire to earn more in the present and increase their Social Security payments in the future.

Be an Example of Sound Estate Planning

It may be cliché but there is some truth to the idea of not counting your chickens before they are hatched. A while back, we wrote about a novel called The Nest in which a family of siblings who were counting on an inheritance that they thought was a done deal ended up with a surprise. 

Recently, in the news there has been talk of another literary inheritance, but these people are not fictional characters. The presumptive heirs to children’s publishing giant Scholastic were surprised to learn that they were not inheriting personal objects or controlling interest in the company from their father. CEO Richard Robinson did not leave the company to family members but to another Scholastic executive with whom he had a romantic relationship. Each article about the surprise also points out that the executive had also gotten close again to his ex-wife so that she and the children they had together were shocked to learn that they did not inherit. The media has stated that Robinson’s sons were not heavily involved in running the company but that his ex-wife had been very involved in the company during their marriage. Robinson, who took over the company from his father, also had four siblings who were shocked at his decision.

It is likely that there will be some kind of legal action in connection to Robinson’s will. Unlike Robinson who left a will that family members want to contest, it seems celebrities like Aretha Franklin and Prince did not leave clear instructions. These scenarios have also led would-be heirs to take legal action.

We addressed the other end of the spectrum in “Should You Give Your Heirs Copies of Your Will?”. In between telling your potential and presumptive heirs nothing and letting them see your will, is the notion of simply outlining what they can expect. They don’t get to scrutinize your estate planning decisions and you also do not leave a legacy of hurt feelings and confusion.

Even if you are not as wealthy as some of the people mentioned here, you can still consult with a Fee-Only financial planner to outline how you want your wealth distributed and set an example of sound estate planning.

Real Estate Is an Investment

Photo by Tierra Mallorca on Unsplash

While people have always taken on joint real estate ventures, the idea of sharing the costs to purchase a property may seem especially attractive now in a time of uncertainty. We are not necessarily referring to when spouses by a house together, although that is also a joint real estate venture. We are talking about people buying real estate with a friend or family member. The rules are different when spouses buy property together.

A man wrote to The Moneyist column about the dilemma he was facing after buying property with his brother and then moving out of state while his brother remained in the house. While he provided documentation for the first time his brother refinanced the mortgage, he wants his brother to buy him out now that the brother wants to refinance again. The brothers disagree about how much the brother who wants to give up his share of ownership in the house should get.

As a younger person, the man who wrote the columnist couldn’t foresee that work would take him to another state or that his brother who stayed would want to refinance. The columnist discusses what he thinks would be a fair way to end the disagreement. But one of the most important things he wrote was “You both decided to invest $10,000 in this house rather than in the stock market…”  Although your choices for what to do with your money are not limited to either the stock market or real estate, you do have to consider that putting a chunk of money into something is an investment. Some people do not think of buying a house as an investment, especially if they are going to live in it.

A Fee-Only financial planner can help you decide which type of investments are likely to fit in with your lifestyle and help you reap the most benefit.

The Importance of Saving in Uncertain Times

A Be the Budget article on the importance of saving states there are “countless” reasons to save since savings offer protection and greater financial freedom. However, it can be difficult to take saving from being a notion to it being a regular habit.

There are a number of rather serious reasons to save money on a regular basis. An emergency fund can be a lifesaver when something unexpected happens. You can save money for big-ticket items, and this does not only include a car or a house; you can also think of a college education as a big-ticket item, even if it isn’t a physical object.

Some people find it easier to save when they think about how they want to be able to afford the things they enjoy in life. You can save specifically for things like a vacation or an expensive piece of clothing or jewelry, but this only makes sense once you have set aside money for emergencies. If the desire to get to the fun stuff motivates you to put aside money for practical reasons first, then let this idea help you move forward to increase your savings

The article brings up some reasons for putting money aside that are not typically included when people talk about the importance of saving. Many people want to save money and secure their finances to leave something substantial for their heirs. There are other people who may not only be thinking about their heirs but also about charitable causes that really matter to them. There are different ways to leave a financial legacy, but it really isn’t possible if you do not have your own finances in order.

In the last minutes of this CNBC report, an investment manager discusses how economic uncertainty is likely to cause people to save more.

Be the Budget concludes: 

“Saving money is important because it provides security, stress relief, and freedom. And while there are countless reasons to save, you just need to find a reason that resonates with you.”

Back to school jitters—parents, students, and employers

Photo by Oliver Hale on Unsplash

Whether you think we have been in one long pandemic, or you are counting waves or phases, the latest news on the spread of COVID-19 may make you nervous. In some states, children have already started a new school year; in other states, children will start at the end of the month or after Labor Day. Some people are worried that children may become ill or that the school year will be disrupted while others are ready to resume pre-pandemic life with no fears.

Parents in the U.S. have been discussing (and joking) that they are keeping all receipts and keeping tags on some of the items they bought in anticipation of the school year. All jokes aside, this is not a bad idea. Even if the school year proceeds normally, parents can still consider returning items because many of us already have more than we need. And we are referring to things like clothes and shoes. You can hold on to school supplies like notebooks and writing tools. Unless you went overboard there too…in that case you can donate to a school supply drive or to some other organization that distributes school supplies to students in need.

If you are an employer, you may also be concerned because of the effects the pandemic  and possible school closures have had and may continue to have on your workforce. With so many different kinds of businesses and organizations out there, there is no one piece of advice to guide employers through uncertain times. And people may be tired to hearing about flexibility, but it is key. Flexible work arrangements, payment plans, and other things some businesses may not have had before may be needed now. Flexibility and creativity are helpful whether you maintain your business as it is or reinvent it.

Everyone—parents, employers, and in some cases even students, need to have cash reserves on hand. If you have never saved before, this is a good time to start an emergency fund. Savings can help you feel more secure even if you never use them.  Having savings can also save the day in some instances. Contact a Fee-Only financial planner if you want help outlining a plan to steady your finances.

Don’t Stop Your Retirement Before It Starts outlined retirement killers that could get in the way of you really enjoying life after working hard for so many years and they include:

Not putting your plan on paper: The article observes that many people are terrified of running out of money in retirement but just as terrified of writing out a plan for their money. They live with the fear as they wing it through retirement. With no idea of how much you have coming in, how much you are spending, and how long you can expect that money to last, you may be putting yourself on a path to make your fears a reality. 

Perhaps some people are afraid that if they put an income plan in print, it will be set it stone. The article says, “A written income plan is like a compass: If you use it correctly, you’ll always know where you are and where you’re going.” You will need to make changes to your plan, but you would do better to have one instead of just seeing what happens.

Being too frugal: There is something finite about retiring and some people worry about spending too much, so they don’t spend anything. To avoid seeing a dip in their retirement savings, some retirees don’t spend much at all. They stay in, don’t travel, and eat small meals. However, the article points out that this strategy could mean that “…20 years into retirement, they turn 85 and realize as time has ticked away, they haven’t done a thing.” Rather than have all of your retirement funds in one pot, you can allocate one part for living in the now and another part that is less liquid for down the road. This really is not very different from what people do when they are working.

Giving it away to the kids: Adult children who depend on older parents (when they do not need to) can drain away retirement savings. On the other end of the spectrum are parents who want to give their heirs some money early and then find themselves without enough to live on in retirement. brings out the “put your mask on first” metaphor that we all have heard but may forget to put into practice. Before supporting your children or gifting them sizable sums of money, make sure that you have sufficient money set aside to last you through retirement.

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