Securities regulators estimate that at least 5 million elderly Americans become victims of financial fraud and other scams each year. With this kind of abuse only expected to increase, these regulators are strongly recommending that seniors formally appoint one or more children, relatives or friends as “trusted contacts” with their bank, brokerage company, financial advisor and other financial institutions. These trusted contacts can’t make transactions or even view their friends’ or parents’ accounts. They’re simply additional people the institution or advisor can reach out to if they’re unable to reach the account owners to inform them about suspicious activities or other account-related red flags.

For further research:

• Next Avenue, Elder Financial Abuse: Why Banks and Advisers Are Stepping Up
• Terrysavage.com, Fighting Elder Fraud
• The Federal Bureau of Investigation: File a complaint on the FBI’s reporting website or call 1-800-CALL FBI
• National Academy of Elder Law Attorneys: A nonprofit resource to help people seeking the services of elder law and special needs attorneys.
• North American Securities Administrators Association: Search for information about trust contacts at America’s oldest international investor protection organization.

The S&P has been very volatile since January, after reaching many record highs over the past seven years. It’s hard for any investor not to feel overwhelmed and worried during these turbulent times. Watch nationally known financial commentators and co-hosts of the award-winning podcast Friends Talk Money, Terry Savage, Richard Eisenberg and Pam Krueger discuss how to stay focused during this market storm of inflation, the prospect for higher interest rates and global political and economic uncertainty in the aftermath of Russia’s invasion of the Ukraine.

Video link: https://vimeo.com/684698371

Mental health studies have shown that those who do nothing after retirement increase their chances of suffering from clinical depression by 40%. That’s why many retirees are choosing to “unretire.” This doesn’t necessarily mean going back to work full-time. Instead, it’s about filling your day with activities that bring you satisfaction.  But to unretire successfully, you need to plan ahead, perhaps even before you retire. Here are five tips to get you started. 

1. Know what you will retire to. Create a vision of what you want your life to be like and what will bring you joy and fulfillment. 
2. If you want or need to work part-time, don’t be afraid to say "no" to opportunities. If you don’t want to work for someone else, consider freelancing or starting your own business.   
3. Maintain an ongoing schedule filled with appointments and activities over the next two to four weeks to encourage you to keep busy. But don’t overfill it.   
4. Find ways to “declutter” your life by trying to spend as much time as you can doing the things you love.  
5. Fully understand your financial picture. Knowing how much income you’ll receive from Social Security, pensions and retirement accounts and what your living expenses will be will help you determine whether you’ll be able to live the way you want to during retirement.  If you're not sure, consider meeting with a fee-only financial advisor.

When it comes to COVID tests, vaccines and medical treatments, the way traditional Medicare Parts A and B pay for these expenses is not always clear cut. For example, right now Medicare only pays for four at-home COVID test kits that you order directly through covidtest.org. However, the Biden administration recently announced that in early spring Medicare will cover the costs of eight free test kits per month, the same number covered by private health insurers. Medicare covers the full costs of vaccines and boosters and the costs of having a healthcare professional administer the vaccine in your home. And if you get infected and need medical treatment in a hospital, Medicare Part A will cover hospital-related costs but you’ll still be responsible for any deductibles, co-pays or co-insurance. In some situations, Medicare might cover some home care costs related to COVID-19 but the rules are complicated. And traditional Medicare offers limited coverage for telehealth services. That’s why if you’re not sure of what is and isn’t covered contact the Medicare administration or your State Health Insurance Assistance Program.

For further research: 

• Covidtests.gov: Order your four free at-home COVID test kits here.  
• Medicare.gov: The official Medicare web site.
• Shiphelp.org: Use this site to find contact information for State Health Insurance Assistance Program consultants in your location.

If you think that the stock market has been going through extreme positive and negative price swings over the past few weeks, you’re not imagining things.  When volatility occurs, however, it’s important to resist the urge and flee to safety. Remember that, over the long term,  stocks have delivered better long-term returns than bonds and cash. The question is: What percentage of your portfolio should be invested in stocks when you’re still saving for retirement or after you’ve retired? If you don’t feel that you have the knowledge or confidence to make these decisions on your own, consider seeking guidance from a fee-only fiduciary financial advisor.  .

Fifty-four million Americans are over the age of 65. And extended life expectancies, coupled with low birth rates, are moving us toward a “super age” where more Americans will be over the age 65 than under age 18. With higher percentages of people likely to live well into their 90s, your retirement nest egg may need to last 30 years or more. Depending on how much you’ve saved and how you plan to live during retirement, you may need to make some adjustments, like leaving your full-time job at age 70 rather than 65 or working part time during retirement. In this super age, employers in particular will have to adjust to an environment where younger workers will be in short supply. Many will have  to end ageist workplace policies and do what they can to retain experienced older workers or create attractive part-time opportunities for those who still have a lot to contribute professionally in their 70s and beyond. 

For further research: 

• Next Avenue, What 'The Super Age' Megatrend Means for You and Your Money
• Bradley Sherman, The Super Age: Decoding Our Demographic Destiny 
• Livingto100.com: Use this life expectancy calculator to estimate how old you will live to be.

Go to any library or your local bookstore and you’ll see shelf after shelf of books offering practical education on various financial planning and investing. Sorting through these choices can be overwhelming, so Pam, Richard and Terry are here to help by sharing recommendations for money-themed books they have learned the most from. These books will help you fortify your personal knowledge of how to save manage and invest your money. While most of these books have been published within the past few years, several are classics that have been updated over the years.

• John Bogle, The Little Book of Common Sense Investing: The Only Way to Guarantee Your Fair Share of Stock Market Returns
• Thomas Stanley and William Danko, The Millionaire Next Door: The Surprising Secrets of America's Wealthy
• Tiffany Aliche, Get Good with Money: Ten Simple Steps to Becoming Financially Whole
• Benjamin Graham, Jason Zweig, The Intelligent Investor: The Definitive Book on Value Investing
• Terry Savage, The Savage Truth on Money

Richard’s picks:  

• John Schwartz, This is the Year I Put My Financial Life in Order
• Jane Bryant Quinn, How to Make Your Money Last: The Indispensable Retirement Guide
• Kerry Hannon, Great Jobs for Everyone 50+: Finding Work That Keeps You Happy and Healthy...and Pays the Bills
• Ryan Frederick, Right Place, Right Time: The Ultimate Guide to Choosing a Home for the Second Half of Life

Terry’s picks:  

• Ron Lieber, The Price You Pay for College: An Entirely New Road Map for the Biggest Financial Decision Your Family Will Ever Make
• Laurence Kotlikoff, Money Magic: An Economist’s Secrets to More Money, Less Risk, and a Better Life
• Napoleon Hill, W. Clement Stone, Success Through A Positive Mental Attitude
• Pam Krueger, The MoneyTrack Method: A Step-by-Step Guide to Investing Like the Pros

From donating appreciated stock to establishing a donor-advised fund to contributing part or all of your Required Minimum Distribution from an IRA directly to a charity, there are many ways you can support the nonprofit organizations and causes you care about while also receiving significant tax benefits. However, before you give to any charity, it’s important to conduct background research to make sure the organization is legitimate and that they’re using most of their donations to fulfill their mission.

For further research:

• Next Avenue, Your Year-End Guide to Giving to Charity in 2021 
• Terrysavage.com, Charity Now 
• Charity Navigator, Charity Watch and Candid: Three resources for researching and vetting public charities. 
• Giving Basket:  Use this online tool to support multiple nonprofits through one checkout experience.  
• State of Wisconsin Department of Financial Institutions Charitable Organizations & Fundraising research section 
• Fidelity Charitable Gift Fund and Vanguard Charitable: Two relatively lower-cost donor-advised fund options

Fidelity Charitable Gift Fund and Vanguard Charitable: Two relatively lower-cost donor-advised fund options

Whether it’s higher prices at the gas pump or at the supermarket, we’re all feeling the impact of inflation in different ways. Most economists predict that inflation will continue into next year, which could create extreme hardships for seniors living on a fixed income or for those who have had to use more of their retirement assets than they planned for. With the high likelihood of the Fed raising interest rates next year to tamp down inflation, these actions could put a damper on the surging stock market. That’s why now may be a good time to look over your portfolio to see if minor adjustments might be needed to reduce inflation risk in your investment accounts. For example, on the bond side you may want to invest in Treasury Inflation-Protected Securities (TIPS) or I-Bonds, whose interest rates rise or fall with inflation. Or you may want to add a small allocation to gold or gold ETFs, since this precious metal historically has served as a hedge against inflation and volatile stock prices. If you’re very speculative, you might even want to consider making a very small investment in cryptocurrencies. However, If you feel that your portfolio is allocated in a way that combines decent income generation from bonds and capital appreciation from stocks, and you have an adequate reserve of cash for emergency purposes, you may not need to make radical changes to protect against inflation, especially since no one really knows how long it will last. If you’re not sure what steps to take, a qualified fee-only fiduciary financial advisor can offer common-sense advice to help you better “inflation proof” your retirement nest egg without sacrificing its long-term growth potential.

For further research: 

• Next Avenue, Money Advice for Retirees on Fixed Incomes When Inflation Is Soaring
• Terrysavage.com, Ravages of Inflation
• Treasurydirect.gov: Learn about and purchase TIPs, I-Bonds, and other Treasury securities.

While those approaching retirement often calculate the total income they may receive from Social Security, pensions, 401(k) plans and taxable investments, many fail to consider the impact of federal and state taxes. For example, if you and your spouse file jointly and your combined income is more than $32,000, up to 85% of your Social Security benefits could be taxable. If you have a pension, you’ll have to pay taxes when it’s paid out to you. When you start taking mandatory or elective taxable distributions from your Traditional and Rollover IRA and 401(k) accounts, it’s important to know ahead of time whether these withdrawals will significantly increase your tax bill. If you take distributions from an annuity, any interest or earnings will be distributed first as taxable income before non-taxable principal. If you’re thinking of selling your home, you may have to pay capital gain taxes if the profit from your sale exceeds $500,000. And, of course, you may always have to pay taxes on income and capital gains you earn in your taxable accounts. Considering how all of these taxes could really add up, it’s important to start thinking about how to potentially reduce your future tax burden long before you leave the workforce. For example, if you plan to use your retirement money to pay off your mortgage sooner, instead of making one large one withdrawal, consider making a series of smaller annual withdrawals to keep you from moving into a higher tax bracket. Or, if you’re thinking about converting your Traditional or Rollover IRA to a tax-free Roth IRA, you may want to do this after you stop working but before you start taking Social Security benefits, when your annual income may be less. And you may want to change the way your money is invested in your retirement and taxable accounts to achieve an optimal balance of investment returns and tax management. Given the complexity of these decisions, working with an accountant and a qualified fee-only, fiduciary financial planner can help ensure that these challenges won’t significantly tax your patience—or your nest egg.

For further research: 

• Next Avenue, What You Need to Know About Taxes and Your Retirement
• Kiplinger.com, State-by-State Guide to Taxes on Retirees
• Investor.gov, Required Minimum Distribution Calculator

From specialized piggy banks for younger children to establishing custodial brokerage accounts or Minor Roth IRAs for teenagers, there are a variety of ways you can give your kids a head start on understanding the importance of saving, investing and appreciating money this holiday season. And don’t forget the most important gift of all—a college education, which you can make more affordable by establishing a 529 College Savings Plan for each child. Earnings are never taxed and can be withdrawn tax free if they’re used to pay for qualified educational expenses. Each parent can contribute up to $15,000 per year per child with no gift tax implications and each grandparent can make one-time, gift-tax free contributions of up to $75,000.

For further research:

• Next Avenue, The Best Financial Gifts for Kids and Grandkids
• Terrysavage.com. Money Gifts for Children
• Moneysavvy.com: Give younger children a hands-on lesson in personal finance by purchasing a piggy bank with four chambers representing saving, investing, donating and spending.
• Fitzsimonscu.com: A credit union offering a wealth of finance-related educational resources for younger children.
• Iallowance.com: Use this app to manage your child’s finances, set up chores lists and pay them when they’ve completed them.
• Acorns.com: This banking and investment app lets your kids automatically “round up” credit card purchases and invest the “change” into a retirement account.
• Stockpile.com: Open a stock investment account for a child for as little as $5 and buy gift cards that let them purchase fractional shares of companies they like.
• Savingforcollege.com: Learn more about 529 College Savings Plans and compare different state options.
• Kiplinger.com: Give your teenager or college student a digital subscription to this highly respected source of information and guidance on saving, investing and personal finance.
• Venmo: This app makes it easy to electronically send money to your kids.
• Beth Kobliner, Get a Financial Life: Personal Finance in Your Twenties and Thirties

Since the start of the COVID-19 pandemic, 42% of consumers have increased the amount they owe for mortgages, student loans and car loans. The one bright spot is that the average amount of credit card debt has fallen during this time period. However, 54% of consumers with credit cards don’t pay in full each month and 18% owe more than $20,000. And the growing popularity of online “Buy Now, Pay Later" (BNPL) programs offered on many online retail websites such as Amazon and Walmart may end up increasing the mountain of debt many Americans are struggling to escape. According to research from Credit Karma, 40% of American consumers have used on these programs, and it's easy to see their attraction. BNPL allows consumers to make purchases now and receive the items right away, while paying them off in four payments. For people who are good at managing and paying off debts, these programs enable them to spread out the costs of purchases without taking on additional credit card debt. However, missing any of these payments can result in stiff late fees and interest charges. Credit Karma's research reveals that 34% of BNPL users have fallen behind on payments and 55% of younger consumers have missed one or two payments. Those who consistently miss payments for BNPL or credit card purchases may also be reported to credit agencies, which could seriously damage their credit score, making it even more difficult to be approved for future loans or credit cards. That’s why it’s critically important to safeguard your credit reputation. If you can, try to pay for online purchases with a debit card. If you use a credit hard, commit to paying off the balances in full each month. If you have outstanding credit card debt, try to reduce it as fast as possible, even if this means forgoing other purchases. And if you want to use BNPL this holiday season, make sure you make each payment on time.

For further research:

• Next Avenue, Buy Now, Pay Later—Should You Spend This Way?
• Terrysavage.com, Buy Now, Pay Later: A Warning!

During the annual Medicare open enrollment period, from October 15 through December 7, you can make many changes in your Medicare coverage. But it’s important to understand the potential impact of making changes—or making no changes at all. First, if you’re in a Traditional Medicare program, you should sign up for a Medicare Part D prescription drug program within six months of enrolling in Medicare to avoid paying a late-enrollment penalty even if you’re not on any prescriptions right now. If you have Part D coverage already, it’s important to review your plan every year during this time to find out how much the annual premiums are rising or whether the prescription drugs you use now are still covered by the plan at the same costs. If your current plan no longer meets your needs and budget, consider switching to another plan that does. During the open enrollment period you can also switch from Traditional Medicare to an all-inclusive Medicare Advantage plan. While Medicare Advantage plans have lower premiums than Traditional Medicare, they’ll generally only cover physicians in their network and all requests for non-emergency care must be approved before they’ll cover the expenses. And if you have a catastrophic illness, you may end up having to pay up to $7,500 per year in out-of-pocket expenses billed by in-network healthcare providers—and up to $11,000 for out-of-network providers. That’s why it’s critically important to read the fine print and understand what is and isn’t covered by any Medicare Advantage plan and compare it to the costs of your current Traditional Medicare coverage. Fortunately, there are many resources you can turn for help in this complicated decision-making process. If it still seems overwhelming, considering working with a qualified fee-only fiduciary financial planner who can help you understand your various options.

Clarification: In the discussion of the maximum out of pocket costs for Medicare Advantage plans, listeners may have had the impression that Traditional Medicare plans don't have deductibles or co-pays. In fact, Medicare Parts A, B and D do have either deductibles, copays, or both. Unless you add supplemental Medicap coverage to cover these costs, you could end up paying significantly more out-of-pocket each year for critical medical care than with a Medicare Advantage plan, since Traditional Medicare has no annual cost caps.

For further research: 

• Terrysavage.com, Medicare Open Enrollment 
• Medicare.gov: Visit the official Medicare website to learn more about Medicare and compare Medicare healthcare and Part D drug programs available in 2022.
• ehealthmedicare.com: Another resources for comparison Medicare options.
• shiphelp.org: A resource for finding unbiased, free one-on-one Medicare counseling and assistance from the State Health Insurance Assistance Program (SHIP) in your state.
• 65incorporated.com: A team of independent consultants providing unbiased Medicare guidance.