Season 3

Grandparents can teach their grandkids about money in the real world

Episode Notes

It’s important for your grandchildren to start building their “money-awareness” at an early age. Since schools generally don’t teach financial literacy and parents often don’t have the time or energy to discuss these matters with their kids, you can play a key role in helping your grandchildren become smarter about money. With younger children, help them understand how much of their parents’ paychecks are spent on food, clothes, mortgage payments and home repairs and taxes. Visit online retailers with them so they can see the costs of the clothes, books and toys they own or want for the holidays. Give them odd jobs that put extra money in their pockets and help them figure out how much of their earnings to reserve for saving, spending, investing and charity. For teenagers and college students, help them learn how to keep debit card spending from spiraling out of control and avoid getting trapped in credit card debt. This is also a good time to teach them the basics of investing by offering inexpensive ways for them to enter the stock market.

A variety of online tools are available to help your grandchildren become smarter money managers. They include:

  • Acorns.com lets you set up investment accounts for your grandchildren that can be partially funded with spare change from family purchases.
  • Stockpile.com offers an inexpensive way for your grandchildren to learn about investing by letting them purchase fractional shares of stocks and ETFs.
  • Visa Buxx debit cards allow parents and grandparents to load money onto prepaid debit cards for their high school and college kids and monitor their spending activities.
  • Moneysavvy.com offers a variety of piggy banks with separate “save,” “invest,” “spend” and “donate” chambers.

Recent Podcasts

Season 3
How to Get the Best Health Care at the Right Price

Show Episode Notes

According to research from Fidelity Investments, retirees should expect to pay $295,000 for healthcare during their retirement years, and this doesn’t include the costs of long-term care. Guest speaker and author Philip Moeller says that while retirees can find many ways to lower their healthcare costs, it takes a lot of time and effort.

A major decision facing those turning 65 is whether to choose Traditional Medicare plus optional prescription drug and supplemental insurance or sign up for an all-inclusive Medicare Advantage plan. While premiums for Medicare Advantage may be lower, your choice of doctors, facilities and prescription drugs may be limited and out-of- pocket expenses could be higher.

People who aren’t committed to seeing specific physicians in person may save money by using telemedicine providers. If your physician is recommending medical procedures, get a cost estimate from your healthcare insurance provider, or use web sites that offer comparison pricing for these procedures.

For prescription drugs, don’t automatically have your physician send your prescription to a local pharmacy. Bring it there yourself and ask the pharmacist if lower-cost generic alternatives or discounts are available. Prescription drug price comparison web sites can help you find lower prices at local pharmacies and national buying clubs. You may also want to ask your physician to help you legally purchase prescription drugs from Canada, where prices are often significantly lower.

If you’re still working and your employer offers a Health Savings Account (HSA), try to take full advantage of this option. Contributions are pre-tax, and all withdrawals you make for qualified healthcare purposes are tax-free. While you can’t contribute to your HSA once you’re enrolled in Medicare, you can use the balance in your account to pay for most Medicare premiums, co-pays and other out-of-pocket expenses.

Finally, if these decisions seem overwhelming, look for help. Your state offers free counseling services to help evaluate your various Medicare options. If you’re friends with a retired nurse or doctor, see if they’re willing to serve as your healthcare advocate—and pay them for their time. And make sure you fill out a healthcare proxy form that gives someone you trust the legal authority to make healthcare decisions for you should you become physically or mentally capacitated.

For further research: 

Season 3
2021 Resolutions You'll Want to Keep!

Show Episode Notes

The start of a new year is always a good time to take a closer look at where you are financially and figure out whether certain changes may help you boost your retirement readiness. While there are many things you can do, here are four steps you might want to move to the top of your "to consider" list.

First, look over your year end investment statements to see if your portfolio needs rebalancing. Even with the economic havoc wreaked by the COVID-19 pandemic, the stock market generated double-digit returns last year. This may have boosted the stock allocation in your retirement portfolio higher than you originally intended. To restore your targeted asset allocation, consider selling some stocks and reinvesting the proceeds into bonds or cash to get your portfolio back in balance. This is something you should do at least once a year, and even more often if you can.

Second, think about converting some or all of your Traditional IRA assets to a Roth IRA. Even though you’ll have to pay taxes on the converted amount, once this money is in your Roth IRA and you’ve held the account for five years, you’ll never have to pay taxes on any withdrawals you make after age 59½. And, unlike with Traditional IRA and 401(k) plans, you’ll never have to take required minimum distributions. The earlier you complete the conversion, the longer you’ll benefit from the Roth’s tax-free compounding.

Third, if you have dividend-paying stocks in your taxable investment accounts, consider using some of this dividend income to help pay for everyday expenses. Since most dividends are taxed as ordinary income whether you spend them or reinvest them, thinking of them as an additional source of annual income may make it easier to rationalize spending them. More importantly, if spending dividends in the years leading to your retirement can help you delay taking Social Security or tapping into the principal of your investments, then you’ll boost the odds of having more money to live on when you’re ready to retire.

Finally, if you’re approaching retirement and are having trouble figuring out these complex financial issues on your own, now may be an ideal time to seek out a fee-only fiduciary financial planner. These professionals can conduct a comprehensive analysis of your investments, projected Social Security and pension payments and your estimated income needs to help you determine if it makes sense to implement any of these new year’s financial resolutions or other strategies to help smooth your path toward a more comfortable retirement.

For further research:

Next Avenue, 3 Smart Money Resolutions for 2021

Show Episode Notes

Podcast Hosts

Pam Krueger

Pam Krueger

Terry Savage

Terry Savage

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Richard Eisenberg

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