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Lauren's Blog

Lauren’s blog covers topics that impact your finances, your family, and your future. Is there a topic you’d like Lauren to tackle? We’d love your suggestions and feedback.

To reach your goals, it’s time to think (really, really) big!

To reach your goals, it’s time to think (really, really) big!

It’s mid-January—that time of year when, at least for most of us, New Year’s resolutions begin to fall by the wayside. The surge of gym-goers and dieters has faded, and we’re back to the same old routine. My question today is this: are you taking steps to get a clearer picture of your financial life? If not, then now is a perfect time to begin changing how you think about your money.

Two years ago, in January 2017, I introduced Jonathan Clements’s book How to Think About Money. Since then, I’ve shared three of the five steps in his approach to what has been called “financial feng shui.” Step Number One: Buy More Happiness. Step Number Two: Bet on a Long Life. Step Number Three: Rewire Your Brain. At long last, it’s time for Step Number Four: Think (Really, Really) Big. As we kick off a new year, there couldn’t be a better time to be sure you’re not only thinking big, but thinking big in ways that can help you build a stronger, more confident financial life that lasts not just the next 12 months, but a lifetime.

Clements suggests (and I have witnessed this time and time again, so I wholeheartedly agree!) that the reason most people struggle to think big about their finances is that we’re programmed to view our financial lives as a series of disconnected pieces. Insurance. Property. Debt. Investments. Cash. Because we rarely talk about how all of these pieces fit together, we end up making decisions that make no financial sense at all. We over-insure our cars but under-insure our lives. We carry credit card debt (an average of more than $8,000, according to a recent study by WalletHub) while “saving” money in low-interest savings accounts. We struggle to save for retirement but don’t hesitate to claim Social Security as early as possible—sacrificing a guaranteed opportunity to nearly double the monthly benefit in retirement. (Read more in my post, Social Security and Women: Tackling the Challenges.) We buy lottery tickets with the hope of getting rich quick but balk at investing in a “risky” stock market (which has returned a compound annual rate of return of 11% since 1980, despite multiple downturns and the 2008 financial crisis).

Of course, “we” doesn’t mean “you” or “I.” Or does it? Chances are that at least one or two of these examples resonates with you. If it does, it’s time to start thinking really, really big about your money.

Where should you start? With your paycheck. Your lifetime earnings is the primary source of every dollar you spend, save, or invest from your first job through your first day of retirement. According to Clements, over a 40-year career, our “human capital” is the source of more than $2 million (in today’s dollars). That’s a big number! And the younger you are today, the higher that number will be. To think big, begin by considering and carefully planning what you want to do with those millions. It can suddenly feel a whole lot like winning the lottery after all!

While Clements offers lots of excellent guidance (I highly recommend reading his book cover to cover), here are the most important takeaways from his Step Number Four:

  1. Consider the tradeoffs.
    Even when retirement is in the distant future, funding retirement should be everyone’s first goal. It’s daunting, it’s far off, and it’s not fun. Plus, it absolutely must be done using current income. But during our working years, other immediate goals often take priority. Buying a home. Educating your kids. Keeping up with the Joneses (and the Jones’s kids). Suddenly that 50th birthday rolls around, you’re nowhere near your goals, and time is no longer on your side.

    To gain perspective, start by taking a look at your net worth. (Check out this net worth primer from Yahoo! Finance.) Add up your assets, subtract your liabilities, and you have your total net worth. Next, look at your short- and long-term goals to determine how much of your $2 million paycheck should go to each one. In most cases, retirement and housing will top the list. (Notice that retirement is #1, always!)

  2. Remember that all debt is debt!
    Almost every day someone asks me this: “If I can get 0% interest, isn’t it smart to buy the [fill in the blank]? It’s free money!” No. It isn’t. No. No. No. To stress the point, all I need to do is refer to net worth. A 0% loan may feel free, but that debt spent on consumption reduces your net worth. If the purchase is part of your long-term plan, it may be fine to take on new debt and “smooth consumption” by spreading out payments over time. If it doesn’t fit into your plan, it’s simply debt, and it is anything but free. Keep debt service within reasonable boundaries. Banks use 36% when qualifying borrowers for mortgages, and Clements recommends student loan payments shouldn’t exceed 10% of your expected income after graduation.

  3. Manage spending.
    At every age, one of the biggest financial levers at your disposal is the ability to vary your spending. If you’re retired and concerned about the recent market downturn, rather than toying with your investment strategy, look at how you can reduce your spending. Avoiding debt and living within your means allows for more discretionary spending. Keep your eyes on your biggest goals, and manage your spending to support the things that matter.

  4. Permit yourself to rethink retirement.
    It may be the case that funding all of your goals requires increasing your lifetime paycheck by working longer than planned. Working past the 65-year mark is more common today than ever, and that’s not necessarily a bad thing. The “greatest generation” may have retired with pensions at 65, but they also expected to live for only another 5 or 10 years. I imagine spending my next 20 or 30 years being as relevant and engaged as I am today. Read more on how rethinking retirement can work for you in my post, Is “retirement” the only answer? Take time to rethink the possibilities.

The New Year isn’t the only reason to focus on thinking big. Today’s stock market has newscasters and financial pundits making lots of noise about how to avoid losses and make the best moves in the face of an economic downturn. Remember that the market is cyclical. There will be ups and, yes, there will be downs. By planning based on your paycheck and goals, market volatility will not affect your financial big picture. Commit to thinking (really, really) big and start building a fantastic financial future today. 

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Ageism, sexism, and staying relevant after 50

Ageism, sexism, and staying relevant after 50

Ageism is everywhere and is the most “normalized” of any prejudice. No matter how experienced you may be or how ideal for a job, once you hit 50, the possibility of being forced to leave your job long before you choose is all too real. And if you do find yourself out work, trying to find a new position can be a maddening process. For women of a certain age, ageism is exacerbated when a good dose of sexism is added to the equation. After striving—and succeeding—at building an ideal career, being marginalized and told that you’re no longer relevant may seem absurd, but in many industries, it’s a bitter reality that can put a serious dent in your sense of self-worth and your financial security.

My own story is just one example. After building a successful career in finance, my corporate job was eliminated. It was a brutal awakening that the path I had been paving for myself for years had ended. When I looked at things from the perspective of my employer, I had to admit that I got it. I realized that if my son Adam and I were being considered for the same job, I could see why they’d prefer hiring him instead of me. He had a hot-off-the-press economics degree. He had no family responsibilities (yet). He could tell better jokes and was a perfect candidate for the after-work sports team. Me? I had one thing going for me: I was great at my job. But in that environment the perception of potential trumped performance.

Like many in the same situation, I soon realized that finding a new position where I could do a similar job at equal pay was not going to be easy. Every employer out there was looking for an Adam—not a me. So I did what I had to: I learned to hustle. I learned how to do payroll. And taxes. And QuickBooks. I worked one day a week as a controller for a manufacturer, and two running someone’s tax office. I got certified as a CFP®. I became an Enrolled Agent. I found my passion for wealth management, and the rest is history. Yes, I persisted.

But as I said, my story is just one of many examples. At just 52, Liz has been searching for a new position for nearly a year after being laid off from the firm where she’d built a very successful career as an organizational leader. Whether it’s because of her age, her sex, or both, no one has offered her the type of role for which she’s qualified. At a time when she should be rapidly accumulating assets to fund her retirement, her financial reality is a significant setback. At 67, Nora would love to be working more, but she can’t seem to add clients to her roster. At 70, Delia is healthy, fit, and extremely accomplished, but she’s burned out after searching long and hard for a job that fits her skills and experience.

What’s most difficult for every one of these women is that each had planned to continue to work into her seventies. However, staying relevant and marketable is much easier said than done—especially for women. According to the AARP, while 72% of women between the ages of 45 and 74 think people face age discrimination at work, that was true for only 57% of men in the same age range. Is it fair? No way. But the only way toeliminate this brutal combination of ageism and sexism is to change the perception that women over 50 are declining or are any less valuable to the workforce than younger workers—both male and female.

The good news is that there are many older women who are actively proving that they aremore than capable of making highly valuable contributions in their fields. At age 72, Andrea Mitchell continues to be an active and important voice in journalism. The bona fide “Queen of Media,” Oprah Winfrey has been ranked as the most influential woman in the world. At 64, she’s showing no signs of giving up her crown. Meryl Streep and Elizabeth Warren are 69. Martha Stewart is 77. Nancy Pelosi is 78. All of these women continue to show us all just how relevant—and powerful—women of a certain age can be.

My favorite example (of course) is Ruth Bader Ginsberg. At 85 years old, RBG is known for her tenacity in a career dominated by men. When she broke three ribs earlier this month, she was back at work before she was even released from the hospital. Her commitment and ambition seem to know no bounds. But what about those of us who are not household names and are struggling to remain relevant? Here are three ways to stay in the game—and keep your bank account flush—no matter what your age:

  1. Own your ambition.
    Don’t buy into the old idea that it’s not “feminine” to be ambitious. (Whatever that’s even supposed to mean!) Take a lesson from RBG: a married Jewish mother, she began crashing through glass ceilings at 17 and hasn’t stopped since. Figure out what motivates you, set your goal, and go for it. No excuses.

  2. Acquire skills people pay for. 
    Whether you’re striving to maintain relevancy in your current job or trying to make a change, identify what skills you can add to the list of things you’re great at. Are you a born coach? Is accounting your thing? Could you be a great organizer or a business writer? Explore what sparks your interest and then find a way to improve your marketable skills and excel in your new field of choice.

  3. Keep hustling.
    Working into your seventies at a corporation may have been part of your master plan, but many older workers soon realize that the traditional path is no longer realistic. If that’s true for you, it’s time to jump into the “gig economy.” To see what types of services are in demand today, take a look at the listings on sites like Upwork, Guru, and Fivrr. To learn more about how to keep working in the new world of work, read my blog post Rethinking retirement in the “gig economy.” Don’t stop hustling until you choose to stop working on your own terms.


According to the American Institute for Economic Research, 82% of respondents to a recent survey said that they successfully transitioned to a new career after age 45. While some took pay cuts early on, about half saw an increase in earnings after “a period of hard work and persistence.” It can be done. As my friend Bobbie says, “ageism plus sexism equals sageism.” I love that! Embrace the sage in yourself and show the world just how relevant you are—at any age.

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Could I live here? Exploring the dream of retiring abroad

Could I live here? Exploring the dream of retiring abroad

I’m in the middle of a dream trip to Amsterdam right now. What a vibrant city! It is walkable and bikeable, and it has a magnificent menu of great restaurants to choose from (my friend Lily and I are doing our best to try them all!). It’s a truly cosmopolitan city that is accessible to all of Europe.  The Dutch are tall, healthy, handsome people who all speak fluent English. There’s great public transportation, museums, a symphony... what’s not to love?

Our visit has been so spectacular that I keep finding myself playing the perennial travel game called “could I live here?” It doesn’t seem so far-fetched. Lily and I rented an apartment for over a week, and after a few days of being tourists and checking off the boxes of must-see attractions, we’ve now settled into a leisurely pace. It’s easy to imagine staying longer, combining work and travel and even (dare I say it?) joining the ranks of the growing number of Americans who have chosen to retire abroad.

But would it be my retirement dream?

Because I’m having fun with my little fantasy, I did some googling and read differing opinions about the feasibility of retiring abroad. In this Ric Edelman article, he writes that “retiring abroad is inappropriate for almost everyone.” Despite the plethora of articles on the joys of international living and lists of the “best international cities to retire,” it seems that turning the dream into reality is often thwarted by things like higher-than-expected real estate costs, lower-than-expected tax savings, unstable currency exchange rates, missing your family and friends, and more. Ugh. My bubble burst before it had begun to float.

But not everyone agrees with Ric’s dismal outlook. According to the Social Security Administration, more than half a million people who live outside the United States receive some kind of Social Security benefit. Plus, many retirees living abroad have their checks mailed to a US address, so the total number of American retirees is believed to be much higher. Even more surprising: those numbers are nearly twice what they were a decade ago. Awhole lot of people are finding a way to live the life of an expat retiree. I decided more research was in order.

Next, I came across this article in Money magazine, The Secret to Retiring Richer Than You Actually Are. It highlights Bob and Rose, a couple from Fairfield, CA, who retired to Ambergris Caye, an island off mainland Belize where I went diving in 2017. The numbers were compelling—their housing costs dropped from $6,000 a month in California to $1,100 a month to rent a two-bedroom condo with a “million-dollar Caribbean view”—and they apparently couldn’t be happier. “Bottom line, we’re spending easily half of what we were in the States, and in return we have our lives back.” As I read those words, I found myself gazing over the Amsterdam treetops from my balcony and drifting back to my expat daydream. That could be me!

Of course, like most life decisions, there are a million pros and cons to consider before leaping to life in a foreign country. Some considerations are purely financial. What is your budget? What is the cost of living in your dream destination, including housing, healthcare (a significant consideration for any aging retiree), and local income taxes? Like all financial planning puzzles, most criteria are less about money and more about how you want to live. Here are just a few questions to ponder if you’re considering such a move:

  • Are you ready to pack up—and give up—your life where you live today?
    Moving to a new, exotic location can sound thrilling, but packing up the life you’ve built can be cataclysmic. If your life includes spending time with your adult children or grandchildren, will you be happy so far away? If you have a strong circle of friends, are you someone who can easily rebuild that vital network in a new community?

  • Are you comfortable living in the “new”?
    New experiences can be wonderful… for a while. And yet I know how great it feels to finally climb into my own bed after a long and exciting trip. Sure, it’s likely you’ll be able to rebuild that sense of “home” after some time, but it’s important to be confident that you’ll be happy enough even in the midst of the transition—and that your new adventure gives you enough joy to outweigh the longing for your old life.

  • Are you prepared to become an expat?
    I recently heard an interview with a university professor who had retired in the south of France. While her French was passable, she said that one of her most significant hurdles was the fact that she may never be accepted as a true local by her new friends and neighbors. That’s just one aspect of becoming the resident expat. There are also the practical aspects. Can you get a residence visa? France, Ireland, and Canada are just a few places clients have told me don’t issue residence visas. Are you able to buy real estate? Can you maintain your US passport? And will you miss July 4th picnics and Thanksgiving dinners more than you could have ever imagined?

I love imagining retiring abroad. Yet, for me I know it is not the right choice—at least not for the foreseeable future. Maybe I’ll go to Europe for an extended stay, perhaps for a month or three to work and play and experience a different culture. I expect that Southern California will always be “home.” If you feel differently, I urge you to do your research, look closely at the financial pros and cons, and look inward to determine if life as an expat is the life for you.

Have fun exploring your dream, and if you want some guidance to help decide if you really could “live here” for good, we’re happy to help!

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5 reasons to consider a Reverse Mortgage (even before you retire!)

5 reasons to consider a Reverse Mortgage (even before you retire!)

When you live in Southern California, the equity in your home is often one of the most valuable assets in your portfolio. Not only are property values above the national average, but also home prices have tended to rise quickly (just talk to anyone who bought a home even five years ago!). Yet, few people see home equity as a “spendable” asset. But if you’re looking for a reliable source of cash today or 10 years hence, a Reverse Mortgage can be an ideal tool to turn your home equity into a tax-efficient source of income—even if you still owe money on your home.

Surprised? So was Lucy when we talked last month. I had already done the research and knew that she could qualify for a Reverse Mortgage. It seemed like the perfect way to access the cash she needed to take care of a half dozen home repairs she had been putting off since her husband died two years ago. As a retired widow, paying the $2,000 mortgage was cutting deeply into her resources, and she felt too cash constrained to set herself up for more bills to pay.

I suggested a Reverse Mortgage because I knew it could give Lucy the financial comfort she needed to maintain her home—whether she decided to stay put for the next 15 years or sell—and that it would also allow her some much-needed financial freedom. When I mentioned the idea, her eyes got wide. She couldn’t believe her ears. “Before Jack died, he told me a Reverse Mortgage was the last thing he would do,” she told me. “He said they were a scam.” She went on to say that using a Reverse Mortgage wasn’t something she even wanted to consider. “It’s too much of a gamble. I don’t want to risk losing my home.”

I can’t blame Lucy (or Jack, for that matter) for being wary. In the early days of Reverse Mortgages, they earned a bad reputation for being a shady product used by slick salesmen to take advantage of desperate, cash-strapped seniors. Despite late-night television ads that make them sound too good to be true, Reverse Mortgages really can be an important part of your overall retirement income strategy. In fact, while a Reverse Mortgage isn’t right for everyone, when used correctly and strategically, it may be just the solutionyou need to manage cash flow and protect your portfolio in retirement. Here are 5 reasons why it makes sense to consider a Reverse Mortgage today:

  1. A Reverse Mortgage is similar to a Home Equity Line of Credit—but with no monthly payments.
    A Reverse Mortgage is similar to a HELOC in that it provides a line of credit based on your home equity. Like a HELOC, that line of credit can be taken as a lump sum, in scheduled monthly payments, or reserved for future draws. However, while a HELOC requires you to pay back the loan with monthly payments over a set period, a Reverse Mortgage requires no monthly payments to the bank. Instead, the loan balance and interest accrues over time. Payment to the bank can be delayed until12 months after you leave your home.

  2. You can use a Reverse Mortgage to pay off your current mortgage.
    For many retirees in our “high rent” part of Southern California, paying even a reasonable mortgage on a fixed income can be a struggle. What’s great about a Reverse Mortgage is that because it’s based on the actual value of your home, you can use the money to pay off your current loan amount, potentially increasing your cash flow by thousands of dollars each month. You can also use a Reverse Mortgage to finance the purchase of a new home.

  3. It’s relatively easy to qualify for a Reverse Mortgage.
    Applying for a traditional mortgage or HELOC can be a challenge, especially if your income is limited. To qualify for a Reverse Mortgage, you must be at least 62, your home must be your principal residence, and you must have sufficient income to pay property taxes, homeowners insurance, and basic home maintenance. That’s it. Since you aren’t responsible for making monthly loan payments, even a less-than-perfect credit score or limited assets should not impact your eligibility.

  4. A Reverse Mortgage can help protect your portfolio.
    If the bulk of your retirement savings is held in an IRA, withdrawing assets before age 70½ will result in a sizeable tax burden. Using a Reverse Mortgage is a highly tax-efficient way to supplement your income and manage your cash flow. Because the money is a line of credit based on the value of your home, there are no taxes to pay. It can also give you the funds you need to delay Social Security until age 70, allowing you to take advantage of the Delayed Retirement Credit that increases your Social Security payment by 8% for each year you delay and nearly doubling your monthly Social Security income. (For more on this, see my blog Social Security & Women: Tackling the Challenges.) Plus, an available line of credit can prevent you from being forced to sell stocks from your portfolio should you need additional cash during a down market.

  5. Reverse Mortgages are regulated to protect the borrower.
    Lucy’s fear of losing her home is not uncommon. With a traditional mortgage, if the loan exceeds the value of your home, the bank can foreclose on your property and force you out of your home. Luckily, Reverse Mortgages are designed and regulated to protect seniors from this very scenario. A Reverse Mortgage is a “non-recourse loan,” which means that if the value of your home drops dramatically (think 2008!) you will never owe the bank more than the value of the loan. That alone can be a great source of financial security in your later years.

Of course, no line of credit is completely free of costs. Like traditional mortgages and HELOCs, Reverse Mortgages charge fees such as interest payments, origination fees, and closing costs. Reverse Mortgages also require a government-mandated, upfront mortgage insurance premium equal to 2% of the value of your home, plus 0.5% of the loan balance. But because these costs are rolled up into the loan amount, you pay no out-of-pocket expenses.

For most borrowers, that 2% is a small price to pay for the flexibility of turning their home equity into a spendable cash resource. And if you use the Reverse Mortgage to pay off your existing mortgage, you may even offset this cost completely. Do keep in mind that a Reverse Mortgage is best if you plan to stay in your home for the next five or more years. Otherwise, the upfront costs may outweigh the benefit.

One last thing to remember is that the best time to get a Reverse Mortgage is before you need it. A Reverse Mortgage should never be used as a last resort when all of your other assets have been depleted. Instead, consider applying for your line of credit while interest rates are still low so you can lock in a great rate. Having this flexible resource available if and when you need it can help turn your home equity into a powerful and strategic financial planning tool for decades to come.

A Reverse Mortgage is a complex planning tool that should be used as part of a carefully constructed wealth management plan. If you need help deciding if a Reverse Mortgage makes sense for you, let’s talk. As always, we’re here to help! 


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Life happens. Plan today to make every transition easier.

Life happens. Plan today to make every transition easier.

Change. For some of us, the word alone can send a wave of panic. And it’s no wonder. Any change means transition, and any transition—whether happy or sad—begins with an ending. In all cases, something or someone fundamental in your life is gone. Marriage brings the end of complete independence. Retirement brings the end of decades of camaraderie, achievement, and a steady paycheck. Divorce brings the end of a relationship, and often years of hopes and dreams. Death of a loved one brings the end of companionship and a huge shift in how you live each day moving forward. Sending a child to school brings the end of one phase of parenting. While every stage of life has its own of transitions, for many women, it’s the 40s that seem to bring on the perfect storm.

In my own life, my 40s were an utter whirlwind. Jamie and Adam both graduated from high school and moved out of the house. Both of my parents died. My husband had a major stroke. And I lost my job. All in a tiny, 5-year window of my life. And like anyone facing such transitions, I didn’t know which way was up. In his seminal book Transitions: Making Sense of Life's Changes, Bill Bridges talks about the period following a significant life change as our “time in the wilderness.” I was the perfect example. As Bridges explains it, it’s a time when we’re forced to separate ourselves from the everyday and digest and respond to the immense change within us. And all of this must happen before we can return to the world, transformed.

While you’re in the wilderness, it’s normal to feel off-balance and uncertain. It can feel like survival is impossible, and the unending stream of questions won’t stop flooding every thought. How will I live? How will I pay the bills? How can I move on? While it may seem impossible at the time, it’s important to recognize that you will find your way. But even as you’re struggling, you must make sure the rest of the pieces of your life don’t fall apart.

I often say that when it comes to your money, there’s no such thing as an unexpected expense. The same is all too true when it comes to “unexpected” changes. Once you reach your 40s, 50s, and beyond, big changes come flying at you, fast and furious. Your children grow up. Your parents get elderly. Your aging body begins to throw you curve balls. You get sick. Your spouse gets sick. Life happens! The good news is that because you know all these things are going to happen, you can prepare for what’s to come—long before you’re thrown into the wilderness. Here’s how to start planning for tomorrow’s changes today:

  • Identify your “person.” In times of crisis, it’s vital to have someone who can give you an outside perspective and help guide your way. It may be an adult child, a colleague, a neighbor, a family member, or a best friend. Whoever you choose, your person is the one you know you can trust to be there when you need help and is the one who makes you feel safe—even when you’re in the wilderness.
  • Create a solid financial plan. All transitions create an imbalance in your life. By working with a trusted advisor now to create a solid financial plan that is stress tested for change, money will be one thing you don’t need to worry about when life happens. Even more, you won’t be starting from scratch after the storm. Instead, you’ll know precisely what your resources are moving forward. That alone can help breathe easier throughout the transition process.
  • Prepare for the inevitable. Like it or not, change is going to happen and your life will be filled with a series of transitions. The kids grow up, move out, get married, and have babies of their own. Parents get old and pass on. Jobs come and go. Marriages shift. Be honest with yourself about what changes you’ll face in the next decade… and the next… and prepare yourself emotionally and practically for what’s to come.
  • Create a community of friends. Emotionally you may feel isolated in the wilderness between the end of one thing and an eventual new beginning. Isolation leaves you vulnerable, so prepare now to engage in community by being a friend, a volunteer, or a member of a church, book club, or card group. The circle of friends you build will be your emotional life raft in the future.

Of course, you cannot anticipate every transition. The worst day of my life was when my first husband left me. My kids were three and five years old. I was a recent West Coast transplant and a stay-at-home mom. I had no job. I had no future. I couldn’t breathe. I couldn’t swallow. I had been thrown into the wilderness and trapped inside a bell jar. When my attorney Sheila Sonenshine told me to breathe, I listened. I inhaled. I exhaled. Again and again. She told me to get a haircut and get a job, and I did that too. Before I even realized it, I was putting one foot in front of the other and moving forward. With her guidance, I found my way out of my wilderness.

When the big changes hit—whether you’ve prepared for them or not—remember to make these your top three priorities:  

  1. Breathe. You’ll feel stuck. You’ll feel blinded. You’ll feel off-balance. But if you can remember to keep breathing, you can (and will) keep moving forward.
  2. Identify what’s urgent. Pay your bills. Be realistic about your finances. Take care of the necessities and put everything else on hold. And wait to make any irrevocable decisions until you’re able to see straight again.
  3. Get “up on the balcony. ”Count on “your person” to help you scan the environment, see the realities of your situation more clearly, and keep you rooted in what’s real. Don’t forget about your financial advisor. She can help you circle back to your plan so you can rise above your emotions and make rational decisions.

No matter what life throws at you—and no matter how unexpected the expected can feel—you too will find your way through the wilderness. The best thing you can do until you get to that next fork in the road is to put plans in place that help make even the toughest transitions easier. And when life happens and you need a guide to help find your way, we’re always here to help. 

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Ready to retire? Consider taking the road less traveled

Ready to retire? Consider taking the road less traveled

It’s inevitable. You tell your friends you’re retiring and the first question out of their mouths is, “What are your plans?” Question number two: “Where are you going?” It seems the connection between travel and retirement has become an obsession in our society. And while it may conjure up images of tropical destinations and “once in a lifetime” adventures, the dream doesn’t always reflect the reality.

My friend Joyce is a perfect example. After working in corporate healthcare for decades, ten years ago she was finally ready to call an end to her career. Of course, the questions and suggestions began immediately: “Where are you off to? Have you thought about a cruise?” “You should go on a safari! It’s the trip of a lifetime!” “We loved Capri! You just have to go!” “You’ve never been to Paris?” Joyce had already traveled a fair amount in her life, for work and pleasure, so the idea of planning a big retirement trip wasn’t even on her radar. Suddenly the pressure was on. She started to feel like she had to travel—it was, after all, what retirees are expected to do.

When we met for coffee a week after her retirement party, she was restless. “I don’t even know where I want to go, but I feel like I should figure it out soon. I’m already bored with my routine!”

It’s a dilemma I see all the time. As retirement looms, people are so focused on closing the door on their careers that they don’t take the time to think about what’s next. They know they’re not ready to settle into a rocking chair, but they have no idea how they want to spend their days.

To help guide Joyce, I posed a question that was much different than, “What’s your travel destination?” Instead, I asked, “What do you want to do in your second half of life?” Joyce looked like a deer in the headlights. I took a sip of my coffee and continued. “Is there anything you’ve dreamed of doing, but have simply never had the time—not including traveling?” We sat quietly for a few minutes, and I could see the wheels turning in her mind. When she did speak, she seemed almost embarrassed, as though she was confessing a dark secret. “Paint,” she said. “I’d love to paint.”

Joyce’s vision was no standard image of an elderly gentlewoman quietly painting landscapes on a sunny hillside. Her dream was to paint large, bold canvasses that would take people’s breath away. I could already picture her in paint-covered overalls tossing paint onto the canvas like a modern-day Helen Frankenthaler. She didn’t know her next step, but she now had a vision in her mind, and it had nothing to do with jumping on a retiree-filled cruise ship.

Don’t go me wrong. I’ve recently discovered my love for travel, and I get that, at least for some people, travel is a retirement dream come true. Even then, I’ve seen peer pressure turn what should be a time of financial freedom into a whole new level of stress and anxiety. Travel anxiety can be especially challenging for anyone who lives in an affluent area, and even more so for affluent couples who set out on their travels together. Suddenly, what could have been a modest, budget-conscious Alaskan cruise morphs into a five-star, luxury journey on the Crystal line—for five times the original cost. The pressure to overspend can come from relatives as well. Knowing that memories are important, it’s all the rage right now for grandma and grandpa to treat the entire family to an all-expenses-paid family vacation, yet few retirees can afford this level of extravagance. I’m all for spending money on experiences instead of “things,” but it’s important to be realistic. If a trip is beyond your budget, that’s the moment you need to stop and ask yourself: whose dream am I living? Mine—or my neighbor’s? Peer pressure can be tremendous, but swallow your ego and make choices that align with your dreams and your budget.

Joyce’s story has a wonderful outcome. After our talk that morning, she decided to make her dream come true. She signed up for classes at Otis College of Art and Design, studied with master teachers, and earned a certificate in Fine Arts. She’s been painting ever since, and though I have yet to see her in overalls (I guess that’s my version of her dream, not hers!), she’s happier than I’ve ever seen her. She does travel a bit, but mostly to New York City on artist trips. By focusing on what she truly wanted, she took the road less traveled (pun intended!) and painted a beautiful “retirement” that even she never saw coming.

If you’re on the cusp of retirement—or even already there—take some time today to brainstorm how you want to spend the next decade of your life. Build a vision board. Journal. And don’t let anyone else’s expectations stand in your way. Once you have some ideas, I recommend sitting down with your financial advisor to figure out a realistic budget, and then take it from there. By charting a path based on your dreams and your finances, you can paint your own picture of a wonderfully fulfilling retirement that’s free of financial anxiety. That’s what I call the “golden years”!

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Ready to be a successful investor? It’s time to rewire your brain

Ready to be a successful investor? It’s time to rewire your brain

If I asked you to make a list of your biggest financial mistakes, what would be on it? Overspending today and not saving for tomorrow? Taking on too much debt? Pulling your money out of a down market, or being guilty of too much hubris when the market was up? Investing in that “sure thing” that wasn’t so sure after all?

No, I’m not psychic. (If I were, I’d most certainly have beaten the market into the ground years ago!) The sad truth is that everyone can add at least one of those mistakes to their list at one time or another. Why? Because so many of the most common mistakes stem from the fact that we are hardwired for financial failure. And hardwiring is extremely tough to fight.

Jonathan Clements does a great job explaining this phenomenon in his most recent book, How to Think About Money. I covered Clements’s Steps 1 and 2 in my blog posts Money really can buy happiness and How long do you plan to live (and are you planning for it?), and while those steps were certainly important, Step 3, Rewire Your Brain, deals with issues I see my clients struggle with every day.The good news according to Clements (and I wholeheartedly agree) is that it is possible to be more sensible about how we manage our money, but changing that wiring takes great mental strength. Rewiring does not mean you need to be smarter or more educated than anyone else—you just need to stay focused on the right things at the right time. Here are four things you can start doing today to start to change your thought patterns and truly begin to think differently about money:

  1. Save like crazy. It sounds so simple, doesn’t it? But unfortunately, our brains aren’t nearly as rational as we’d like to think. Many people lack the self-control not to overspend, so they take on too much debt. My friend Lydia was always one of the most “fabulous” people I knew. She always had the best clothes, the cutest shoes, and the fanciest car. But Lydia was a victim of her own fabulousness. While she was dressing to impress, she wasn’t saving enough for retirement. Now in her late 60s, she has to continue to work—not by choice, but by necessity. In contrast, there’s the story of Carol Sue Snowden, a librarian who lived modestly and then made headlines for gifting the library where she worked over a million dollars in her will. As Clements says, “Growing wealthy is ridiculously simple, but it isn’t easy.” It requires saving early, saving often, and focusing on becoming wealthy tomorrow—not appearing wealthy today.
  2. Embrace humility. Are you a victim of the Lake Wobegon Effect? In Garrison Keillor’s fictional town of Lake Wobegon, “all the women are strong, all the men are good-looking, and all the children are above average.” The Lake Wobegon effect is the tendency to overestimate your capabilities and see yourself as better than others, and it’s a common affliction. The antidote? Embrace humility—and require anyone managing your money to do the same. Because when it comes to investing, average is good! But our hardwired brains want so badly to be above average that we feel a need to beat the market, or we hire someone who says they can beat it for us. But historically, active investors lag the market indexes. That means that “buying and holding” almost always wins in the end. While your neighbor may be bursting with the news of an approach that helped him beat today’s market, you can bet he’ll be quiet as a mouse when his returns fall behind. “The meek may not inherit the earth,” says Clements, “but they are far much more likely retire in comfort.”
  3. Find value. If you find it difficult to ignore fluctuations in the market, you’re not alone. It can be a challenge to turn off that voice in your head that starts making noise when the market dips. Remember this: your goal is to seek long-term value in your portfolio. Ultimately, the market is efficient (really!), and that efficiency makes it extremely difficult for anyone—even the most seasoned money managers—to beat the market over the long term. Focus on investments that are poised to deliver value, and then stay put. (For more on how to win this battle with your brain, see my blog post Market volatility making you crazy? 5 tips to managing your emotions.)
  4. Stay grounded. When the market does bounce around (and considerable bounces are inevitable), think like a smart shopper: when the market is down, the companies who offer stock haven’t fundamentally changed, which means their stock is on sale! Avoid mental errors such as over-confidence, loss-avoidance, anchoring, confirmation bias, and more. Stay focused on the long term, secure in the knowledge that market prices of securities will fluctuate, often wildly, in the short term. Over decades, the trajectory has always been up. By staying grounded in the knowledge that you own shares in real businesses whose value is derived from dividend yields and earnings growth, you will achieve the investment success to which you are entitled.

It’s natural: every time you think about money, your hard-wired, reptilian brain tells you that your very survival is threatened. But in this case, following your instincts may be the very worst thing you can do, leading to financial mistakes that can truly threaten your future. It requires great mental effort to save, stay humble, find value, and stay grounded, but by challenging your thought patterns, you can train yourself to think differently about money and help drive your own success.  And if you need help with the rewiring, give me a call. I’m here to help!

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When risk is a good thing, embrace it!

When risk is a good thing, embrace it!

Risk. It’s a word that makes most of us feel uncomfortable—at best. Even if you’ve been blessed with an appetite for adventure, when it comes to taking risks with money, you may find your stomach feeling a bit queasy. While I can’t recommend skydiving or cliff jumping (especially for my retired clients!) taking the right amount of risk with your money isn’t a bad thing. In fact, it’s often the best way to help grow your assets to meet your retirement goals.

Anne is one of my favorite examples of a smart risk-taker. She loves (and I mean loves!) Las Vegas. She loves pitting the thrill of victory against the agony of defeat—even when it is her money at stake. And yet, despite her penchant for slot machines, she’s clearly not much of a true thrill-seeker. She has had the same gambling budget since the first day she walked into a casino over 30 years ago, and she’s never lost more than she can afford to lose. “I started with $100 of ‘play money’ in my wallet, and I promised myself I’d never let myself dip below my $20 reserve,” she says with a smile. And she does have something to smile about. Over the years, Anne has won (and lost) thousands of dollars, just playing the slots. “For me, it’s my favorite form of entertainment,” she says. “It’s a ‘safe’ risk that makes my adrenalin go crazy!”

A ‘safe’ risk. What an interesting term.

The dictionary definition of risk—“exposure to danger, harm, or loss”—sends a pretty clear message that risk is something we should avoid if at all possible. And yet, as counterintuitive as it may sound, when it comes to investing, risk is the one thing that drives reward. In fact, in a capitalist economy like ours, investors are paid to take risk. It’s that simple. Every time you invest in a company you are, in essence, assuming ownership of that company and are entitled to the rewards that owners receive. When earnings grow, you reap the rewards. If the company fails, your investment will fail as well. That’s the risk.

In skydiving, the risk is pretty clear—particularly if your parachute doesn’t open! In investing, risk is a bit more complicated. To understand why investment risk is something to embrace, let’s look at the three basic kinds of risk:

  • Credit risk. When a bank loans money to a borrower, there is a risk that the borrower may default on the loan. If that happens, the bank loses the principal of the loan, and the interest associated with it. That’s credit risk. Your own credit rating dictates your ability to borrow money and the interest you pay, and the same is true for bonds. Lower-yield Treasury bonds are “safer,” so they pay less than high-yield or “junk” bonds. That means that, as a bond investor, when you take more risk by lending to less credit-worthy borrowers, you get paid more interest.  
  • Term risk.When you buy a bond or CD, you are lending money for a fixed period. When the bond is due, your money is repaid. When you lend money for a few days, that’s a short term. When you lend money for ten years, that’s clearly a longer term. Long-term is riskier than short-term because you don’t expect the borrower’s situation to change in a month, but in 10 years? Anything can happen. That’s term risk. That is why a one-month CD pays far less interest than a five-year CD. So, term risk is another way investors get paid more to take on more risk.
  • Equity risk.Every time you hold stock in a company, you accept the risks of ownership. As an owner, you are paid a share of earnings, and the value of each share increases with company growth. Because of the risk of ownership, investors are paid an equity risk premium to bear uncertainty, price fluctuations, bear markets, business failures, and other perils. Earning the equity risk premium is how investors get paid more for owning stocks.

As an investor, by definition, you must be willing to take some level of risk to reap the rewards. Whether you take on credit risk, term risk, equity risk, or a combination of all three, risk creates value. While risk and reward may not be a perfect relationship, if you add time and discipline to the equation, it’s nearly perfect. It’s what capitalism is all about, and it’s what gives every investor (including you!) the opportunity to leverage assets for continued growth.

Of course, just like Anne and her slot machines, the smartest way to play is to know how much risk you can accept. If you’re a younger investor with years of saving ahead of you, you have time on your side. You can breeze through a bear market, happily buying up equities at sale prices, and waiting for the inevitable bull market to come your way decades from now. If you’re already retired, you may still have years ahead to enjoy growth, but you’ll need a strategy to meet your changing income needs. Whatever your life stage, remember that risk is your friend. Unless you’re skydiving, in which case I can only recommend that you check that parachute just one more time before you jump!

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House hunting seniors: Finding the right option for optimal living

House hunting seniors: Finding the right option for optimal living

It seems everywhere I go these days, there’s one thing on everyone’s minds: where (and how) to live after retirement. In the past week alone, the topic has come up everywhere I turn. In my office, of course. But also at my bridge club, on the golf course, and even at my hair salon. And everyone seems to be grappling for answers.

I have to begin by saying this first: just like everyone else, I don’t have any easy answers. It’s such a complex question, and the “right” solution is going to be different for everyone based on everything from your age and general health to your social and environmental preferences. But one thing is for certain: with the tsunami of Baby Boomers hitting their later retirement years, this issue is only going to escalate. As I look at the options that are out there today, I wonder if finding new, better solutions is going to be up to us seniors rather than the companies who have been busily trying (and in many ways failing) to deliver on what we need to live the most fulfilling lives possible in our last stage of life.

At the moment, the most common options for seniors include:

  • Aging in place. This has been a popular discussion for years now, both among seniors and in the press. It’s attractive to many because most of us have spent a good part of our lives making our houses our homes. Whether we’ve been in the same place for decades or just a few years, we’ve nested here. It’s where the things we love exist, and it’s where the people or the memories of the people we care about the most reside. It’s comfortable. But it’s not optimal for everyone. The cost of in-home care is not covered by Medicare, and the costs of care can be exorbitant. Plus, it can be lonely, especially of your home isn’t in an urban environment where company is just past your doorstep.
  • Independent living communities. These communities are usually built by corporations for a profit, so they can be costly, but they can be the perfect fit for some. Many of my closest friends call Laguna Woods home, and they’re constantly telling me how wonderful it is and how strong the community is there. Another friend is looking at Rancho Mission Viejo, a new 55+ development just east of Laguna Niguel. It’s luxurious, but those luxuries come with a hefty price tag. The pros of these communities include local facilities, a close-knit group of other seniors, and lots (and lots!) of activities. The cons: every neighbor is a senior as well, so there’s no diversity and no “younger” energy. Plus, by necessity, these larger communities are often a city unto themselves, so getting beyond the gate requires driving, which is not always an option in later years.
  • Assisted living communities. Also called Continuing Care Retirement Communities, these facilities are designed for seniors who require a variety of levels of care and provide everything from independent living options to full-time nursing care and, in some cases, even hospice facilities. This type of community can be particularly attractive to couples who want to age together in a facility that offers various levels of care in a single location. Though they’re often expensive, a couple can move there together as early as age 55, sometimes even into a single family home, and then shift their joint or individual level of care as they age. Interestingly, as a board member at Heritage Pointe, a senior living center in Mission Viejo, I’ve seen an unexpected evolution to the structure. As the independent residents have aged, the facility has become more of an assisted living facility than a hub of senior activity. As a result, it’s not attracting younger retirees, so the mission of the facility has evolved as well. Until we identify a solution to the challenge (which we will!), this facility—and I’m sure others like it—are in a bit of a quandary.
  • Co-housing. Personally, this concept intrigues me. The concept is that seniors who have the same preferences work together to purchase and design their own housing situation—where they want it, and how they want it. I’d love to live in Dana Point after I retire, but it’s doubtful I could afford an “aging-in-place” option there, and there are no independent or assisted living communities in the area. By banding together with like-minded seniors, it may be possible to purchase an ideal property and either lease commercial property on the site to provide essential services, or ensure the property is located near the services we would need. It may sound like a new twist on the old commune, but I think it could really work this time around!
  • Naturally Occurring Retirement Communities (NORCs): This is my other favorite. A twist on “aging in place,” NORCs are community-based programs formed in neighborhoods where the residents are already living and aging. Rather than having to leave their own homes, services and facilities evolve out of the community, and are built or formed to serve its aging residents. On the plus side, seniors are able to stay in their existing neighborhoods and maintain close relationships that can dramatically improve quality of life as they age. And with built-to-serve facilities, they can receive a certain level of care. On the downside, while some NORCs establish assisted-care and other medical-level facilities within the community, high-need care is not part of the standard structure.

If you’re overwhelmed with this major decision, know this: you are not alone! There’s so much confusion and emotion about this major life choice, and it’s no wonder. Everyone understands that buying a first home is a huge decision—one that’s rife with excitement and new beginnings because it’s understood that what you choose will contribute to your quality of life in this first stage of adult life. Choosing where to spend the last phase of your life is perhaps an even bigger decision. Plus, the options are limited. The only advice I can offer is to make that decision while it’s still your decision. Don’t wait until you’re “ready”—that time may never come or, when it does, the decision may no longer be your own. No matter how overwhelming it may be, consider the options (or even better, create your own!) and make the right choice for you.

Have insights or suggestions based on your own experience? Please email me your thoughts. I’d love to hear them!



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Retirement stress: When “living the dream” doesn’t come easy

Retirement stress: When “living the dream” doesn’t come easy

I came into financial planning in the second half of my career. It is truly a calling for me. As a CFP®, I adhere to a code of ethics that holds competence as a core principle and requires a commitment to lifelong professional education. Because there is always more to learn and new ways to help my clients achieve their goals, I recently began coursework through the Sudden Money Institute to become a Certified Financial Transitionist®. It’s a natural fit for me, and I’m thrilled to say that after completing Part One of the program, I’m already putting some of the lessons into action.

One of the topics we covered in the first session last weekend was the importance of mindset in how one defines and handles the stress that comes with every life transition. Mindsets exist at two ends of the spectrum, with a growth mindset at one end and a fixed mindset at the other. People with a growth mindset see stress as a challenge, while people with a fixed mindset see stress as a threat. Every transition comes with stress, but your mindset dictates how you respond when something you care about is at stake.

Oddly (or so I thought so at first), one of the most stressful transitions I could think of with my clients is one that is viewed as a positive change: retirement. In nearly every case, approaching retirement is full of a crazy amount of stress. So much for that vision of the happy couple laughing hand in hand as they stroll on the sand! Instead, retirement often comes with a ton of uncertainty, fear, disagreement, and emotional chaos. Here’s an example:

My clients Wendy and Brian have been looking forward to retirement for years. Brian is five years older than Wendy, so he retired a few years ago. Wendy is still working at a job she loves, but Brian wants to travel, hike and fish, and do all the things he’s afraid they’ll soon be too old to enjoy. They agreed on a retirement date for Wendy, and with my help, they’ve been working toward that goal. Now that date is just around the corner, and instead of feeling joyful, Wendy is completely stressed out. When she and Brian met in my office last week, I could feel the tension between them, and despite my best efforts, I couldn’t seem to help them focus on the rational aspects of their retirement plan. Both Wendy and Brian were swimming in emotion, and their upset was palpable. When life changes, money changes—and that’s stressful.

Wendy’s mindset about retirement was a fixed mindset. She had a negative view of stress, and every decision felt life-threatening. When I asked Wendy what she was thinking and feeling, she said, “I realize how confused I am about what my life will look like after I leave my job. Who will I be? What can I afford? Will we have enough money to live like we do now? Brian wants to travel the world, but I’m not sure that’s at the top of my list,” she said. “Everything feels upside down. I realized I’ve been running so hard to get to the end of work that I haven’t been able to face what is beyond. What is retirement? There are so many things I need to understand before taking the leap!”

Brian’s mindset about retirement was a growth mindset. He realized all the changes he would have to address, but he was excited and challenged. Although Wendy and Brian were in sync with their goals and dreams, their different mindsets triggered very different responses to the stress that comes with the transition to retirement. Given that there are two sides to money—the technical and the emotional—our work together will address the emotional side first so Wendy and Brian can rise to the challenge of the next phase of life, connect with others, and learn and grow together.

If your retirement (or another life-changing event) is around the corner, here are three steps to get you started on a path toward your “new normal”:

Step 1: Examine your mindset about stress
By taking a deeper look at how stress triggers your responses, you can harness the power of stress and position yourself to learn and grow. Do you act or react to major change or loss? Are you reactive and closed off, or are you responsive and open? Acting puts you in a growth mindset, while reacting puts you in a fixed mindset. Explore ways to take control of change. Share your stories and your history so you can better understand yourself and those who share your life.

Step 2: Know what’s at stake in the future
This iswhere you move towards the stress to name it, understand it, and embrace it. When life changes, money changes, and this is important. At this stage, it’s important to name your fears. Are you afraid of being a bag lady, or are you afraid of failing to live the life of your dreams? Maybe you’ve always wanted to write a novel, but your career got in the way, and you now have the time to realize your dream. Maybe you want to see the Northern Lights or spend more time with grandchildren or take up a second career (perhaps a service-based career like the opportunities I talked about in my recent blog Inspirations: Finding purpose in your second half of life). There are no rules. Take the time to explore how you want to live it so you can make it happen.

Step 3: Harness the power of stress
With a growth mindset and a clear idea of what is at stake—for you—you will be more open to opportunities and learning. Now you can work on the technical side of money; set realistic budgets, set meaningful goals, and strive to build a community of friends and family. Remember that after 50, changes come fast and furious, so when the next change comes (and it will), you’ll have created the capacity to be responsive rather than reactive. You’ll get a little older; you’ll get a little wiser, and the trade-off will be a good thing!

When I meet with Wendy and Brian meet next week, we’ll follow these steps, taking the time to dig into each area to help them find a deeper connection, decrease stress and, most importantly, have a shared growth mindset that will serve them well through this transition and all the rest to come.

Remember: endings bring transitions, and every transition leads to a new normal. Fostering a growth mindset through transitions will enable you to harness the creative power of stress so you can get to your “new normal” with as little uncertainty, fear, disagreement, and emotional chaos as possible.

Having troublesliding smoothly into retirement? This email address is being protected from spambots. You need JavaScript enabled to view it.  to schedule a time to chat. As always, I’m here to help!

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Inspirations: Finding purpose in your second half of life

Inspirations: Finding purpose in your second half of life

Retirement. It’s a concept that certainly means different things to different people. But is it time to change how we define it—completely?

While I was away on my abolutely blissful vacation in Belize last week, I finally had time to dig into Marc Freedman’s book, Encore: Finding Work that Matters in the Second Half of Life. It has me utterly inspired. It’s no secret that I’m passionate about retirement planning—and not simply from a financial perspective. I feel part of my personal mission is to help people of all ages discover how to be truly happy both pre- and post-“retirement,” however they choose to define it. But as I read the book, I found myself swimming in new ideas.

First, I realized that I am in an “encore career,” Freedman’s term for a later-in-life career that has a greater purpose and serves a greater good. My path to becoming a financial advisor wasn’t straightforward, but once I found my passion, I was able to apply the myriad skills I’d learned in my prior career and in my life to help others. The result: I’m fulfilled every day because my life has greater meaning and value.

I’m not alone. In his book, Freedman shares his experiences watching others go through similar shifts. But it’s not always easy, in part because of society’s expectations of those of us in the second half of our lives. Think about it: Here is a person at the height of professional ability. A person who has accumulated a career’s worth of knowledge and personal insight. And our culture suggests that now is the perfect time to bring that growth to a screeching halt and, in essence, dive into a second childhood. To reduce our activities to simple leisure as though we’re no longer capable of achieving or providing any good in the world. So we substitute busy-ness for purpose. We focus on building a better golf game instead of building a better world. As a result, people who have been successful in their careers are often thrown sideways when facing a traditional retirement. It’s no wonder!

But what if we took a completely different approach to “retirement”?

This is precisely what Freedman is trying to help foster. He founded Encore.org, a non-profit organization with the mission of “building a movement to tap the skills and experience of those in midlife and beyond to improve communities and the world.” By engaging millions of people in later life as a vital source of talent to benefit society, he hopes to help create a better future for young people and future generations. If it sounds lofty, just take a look at some of the personal stories on the site, and you’ll soon see how very real it can be.

What Freedman found is that highly skilled individuals—attorneys, physicians, volunteers, business leaders, artists, teachers, and more—thrive by finding new ways to apply their expertise in new, meaningful ways. He even created the Purpose Prize to recognize and reward passionate change-makers in the second half of life who are tackling the world’s most urgent problems though social entrepreneurship and innovation. The organization has awarded over $5 Million in prizes to people working in everything from early childhood education to eradicating homelessness.

As I read his ideas and stories, I couldn’t help but wonder if our highly publicized “retirement crisis” isn’t a crisis at all, but rather a major shift—and an incredible opportunity for change. What if every one of us was able to find an encore career that not only gave us greater personal purpose but also helped build a better world? How much change could we drive together? How much happier would our communities be when filled with older, wiser women and men doing good for others? How much stress would be diminished if these encore careers could support the financial needs of those who have been “aged out” of their earlier careers and are seeking something new?

Of course, as a financial advisor, I understand that this type of change takes money (see my blog on creating a freedom fund for more on that topic!). I was lucky when I transitioned into my encore career; I had a solid “freedom fund” on hand, so I was able to take the time to explore options, identify dreams, and discover my purpose. I was blessed to work with Stanlee Phelps, an amazing life and business coach who helped me find my path. Since becoming a financial advisor in 2003, my passion has never waned. After reading Freedman’s book, I decided that now is the time to take it one step further. Before I made it home from Belize on Saturday, I signed up for a year-long course to become a Certified Financial Transitionist™ (CeFT™), beginning in June. This training will give me even greater knowledge and skills to guide my clients through financial transitions, including managing the physiological, sociological, and psychological impacts of change. I can’t wait.

No matter where you are in life, I urge you to read Freedman’s book. You just may find yourself no longer looking for a “job,” but instead looking for a way to help others. And that small but significant shift may lead you to a new life’s work that is much more fulfilling—and financially rewarding—than you ever dreamed possible.

Ready to start rethinking your approach to retirement?  This email address is being protected from spambots. You need JavaScript enabled to view it.  to schedule a time to chat. As always, I’m here to help.

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Celebrate Retirement Planning Week: Create a “freedom fund”

Have you noticed that every day or week is dedicated to something? It was Siblings Day last weekend. There's National Doughnut Day (a fundraiser for the Salvation Army), National Hot Sauce Day (January 22), and yesterday was Scrabble Day. Among all the frivolity, there are some worthwhile campaigns, including National Retirement Planning Week, which began this past Monday.

The attention on retirement planning begs this question: Does retirement planning need an "awareness week"? Absolutely! While no one needs to be made more aware of doughnuts, anything that gets people to pay attention to something that will help them live a better life is worthwhile. As a survivor myself, I hope Breast Cancer Awareness Month pushes women to get that mammogram they’ve been putting off. As a financial advisor, I hope Retirement Planning Week pushes you to take a serious look at where you are today—and where you need to be when it comes to funding your future income. At the same time, I’d like to make a unique push for redefining retirement planning as most people think of it today.

When I first met Katherine ten years ago, she was enjoying a fantastic career at a large, global company. She was traveling the world, entertaining, and a living a high-end, high-cost lifestyle that included a sizable mortgage. She came to me to start planning for retirement. The challenge: she was already in her mid-50s. And while she was earning a bundle, she had almost nothing stashed away to support her once those big paychecks stopped coming in. The first time we met, I suggested we rethink her approach; rather than “saving for retirement”, I recommended she start building a “freedom fund” for the future. Katherine loved the idea. She looked at it like a credit card payment that had to be paid in full each month, and she was religious about her contributions.

Five years later, calamity struck. The company she’d been with for the bulk of her career went bankrupt and laid off 80% of its employees, including Katherine. At the same time, she was hit with a frivolous lawsuit and had to spend thousands of dollars to defend herself in court. Luckily, her freedom fund was at the ready. She was able to pay herself each month while she figured out her next career move, and she paid her legal fees without having to take on any debt. Within 12 months, she had reestablished her career—this time as an independent consultant—and was once again growing her freedom fund. She’s not looking to retire any time soon, but she’s paying off that debt to herself now so she can focus on enjoying life when the time comes.

At 65, Katherine is redefining “retirement.” Like many her age, she’s continuing to earn, but she stopped looking for a “job” the day she walked out the door of her last one. Katherine is part of the growing gig economy. While much of the coverage about this new way of working focuses on millennials, many pre- and post-retirees have jumped on the lucrative bandwagon of taking on a portfolio of work to bolster their income, and possibly delay retirement completely. For many, the Great Recession brought an unplanned early end to their careers, and they found themselves overqualified and, frankly, over the hill when looking for a new job. Like ‘Cassie’ in the classic musical A Chorus Line, they found they couldn’t take a step back from being a star to being just another player—no matter how much they wanted to be. They took a new approach to working and turned the job economy on its head. From consulting gigs to driving for Uber to freelancing, older workers are finding new ways to make ends meet and completely rethink how they view life after 65.

When it comes to retirement planning, there are two sides of the equation: what you spend, and what you have coming in. To have resources you’ll need, start your freedom fund today. Or take a fresh look at how you’re funding the plan you already have. If continuing to work after 65 is appealing, consider joining your peers in the growing gig economy. It can be a great way to stay mentally and physically active while keeping some income rolling in the door.

However you define retirement, realize that it’s a complex balancing act—emotionally, physically, and financially—that you should start thinking about long before you receive that gold watch. To make the most of it, view your retirement income as a debt you owe yourself, and pay it in full every month. By the time you do decide to stop working once and for all, you’ll be truly debt free, and the last thing you’ll need to worry about is retirement income. How’s that for retirement planning awareness?

Need help creating your retirement “freedom fund”?  This email address is being protected from spambots. You need JavaScript enabled to view it.  today to schedule a time to chat. As always, I’m here to help.


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All written content on this site is for information purposes only. Opinions expressed herein are solely those of Lauren S. Klein, President, Klein Financial Advisors, Inc. Material presented is believed to be from reliable sources and we make no representations as to its accuracy or completeness. Read More >