Financial Literacy Never Stops!

Contributed by: Sandra Adams, CFP®

April is Financial Literacy Month. When many of us think about financial literacy, our thoughts immediately go to our children and educating them on the basics of money – debt, credit, budgeting, and the like. But the reality is that financial literacy is a lifelong process and applies to all of us at all ages and stages of life – the learning never stops. From a child's earliest spending to a senior citizen's retirement decisions, individuals apply their knowledge and skills to financial choices, and it is important that they are making informed decisions at all stages.

What we know:

• People who are financially literate are generally less vulnerable to financial fraud.

• Research shows that financial illiteracy is very common, with the Financial Industry Regulatory Authority (FINRA) attributing it to 66% of Americans.

• In its Economic Well-Being of U.S. Households in 2020 report, the U.S. Federal Reserve System Board of Governors found that many Americans are unprepared for retirement. More than one-fourth indicated that they have no retirement savings, and fewer than four in 10 of those not yet retired felt that their retirement savings are on track.

• Low financial literacy has left millennials—the largest share of the American workforce—unprepared for a severe financial crisis, according to research by the TIAA Institute. Over half lack an emergency fund to cover three months' expenses, and 37% are financially fragile (defined as unable or unlikely to come up with $2,000 within a month in the event of an emergency).

A strong foundation of financial literacy can help support various life goals, such as saving for education or retirement, using debt responsibly, and running a business. Key aspects of financial literacy include knowing how to create a budget, plan for retirement, manage debt, and track personal spending. The earlier one can begin to learn the basics, the better. However, there is always time to learn and apply lessons learned when it comes to handling one's own finances. 

Benefits of Financial Literacy:

Holistically, the benefit of financial literacy is to empower individuals to make smarter decisions. More specifically, financial literacy is important for several reasons.

• Financial literacy can prevent devastating mistakes: Seemingly innocent financial decisions may have long-term implications that cost individuals money or impact life plans. Financial literacy helps individuals avoid making mistakes with their personal finances.

• Financial literacy prepares people for emergencies: Financial literacy topics such as saving or emergency preparedness prepare individuals for the uncertain. Though losing a job or having a significant unexpected expense are always financially impactful, an individual can cushion the blow by implementing their financial literacy in advance by being ready for emergencies.

• Financial literacy can help individuals reach their goals: By better understanding how to budget and save money, individuals can create plans that set expectations, hold them accountable to their finances, and set a course for achieving seemingly unachievable goals. Though someone may not be able to afford a particular goal today, they can always make a plan to better increase their odds of making it happen.

• Financial literacy invokes confidence: Imagine making a life-changing decision without all the information you need to make the best decision. By being armed with the appropriate knowledge about finances, individuals can approach major life choices with greater confidence realizing that they are less likely to be surprised or negatively impacted by unforeseen outcomes.

If you are like we are at The Center and are interested in helping spread the word about Financial Literacy, organizations like Junior Achievement, The JumpStart Coalition, and The Consumer Financial Protection Bureau are great places to go to start.  

Sandra Adams, CFP®, is a Partner and CERTIFIED FINANCIAL PLANNER™ professional at Center for Financial Planning, Inc.® and holds a CeFT™ designation. She specializes in Elder Care Financial Planning and serves as a trusted source for national publications, including The Wall Street Journal, Research Magazine, and Journal of Financial Planning.

The foregoing information has been obtained from sources considered to be reliable, but we do not guarantee that it is accurate or complete, it is not a statement of all available data necessary for making an investment decision, and it does not constitute a recommendation. Any opinions are those of the Sandra D. Adams, CFP® and not necessarily those of Raymond James. While we are familiar with the tax provisions of the issues presented herein, as Financial Advisors of RJFS, we are not qualified to render advice on tax or legal matters. You should discuss tax or legal matters with the appropriate professional. Examples used are for illustrative purposes only.

Securities offered through Raymond James Financial Services, Inc. Member FINRA/SIPC. Investment advisory services offered through Center for Financial Planning, Inc.® Center for Financial Planning, Inc.® is not a registered broker/dealer and is independent of Raymond James Financial Services.

Certified Financial Planner Board of Standards Inc. owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER™, CFP® (with plaque design) and CFP® (with flame design) in the U.S., which it awards to individuals who successfully complete the CFP Board’s initial and ongoing certification requirements.

Plan Now for Your 100+ Life

Contributed by: Sandra Adams, CFP®

Between 1900 and 2020, the average life expectancy in the United States rose by more than 30 years. This was due, in part, to improvements in multiple health measures and medical advances such as vaccines and antibiotics. As of 2021, there were 89,739 centenarians living in the U.S., nearly twice as many as there were 20 years ago, according to data from the Population Division of the United Nations. According to research by Dr. Michael Roizen, emeritus chief wellness officer at the Cleveland Clinic and Al Ratner, former CEO and chairman of Forest City Enterprises, as published in their book: “The Great Age Reboot: Cracking the Longevity Code to Be Younger Today and Even Tomorrow,” there are promising medical breakthroughs happening now that could prolong life even more in the near future. According to Dr. Roizen, there is a point in the near future when “90 will be the new 40” in which people will live to be 150 and retire at age 75!

Whether you WANT to live to 100+ may be irrelevant — it may be happening whether you desire to live that long or not. If we will truly be living to age 100+, how should we begin to plan for this? Not only from a financial perspective, but from a personal, psychological and emotional standpoint so that we can have meaningful and valuable long lives? Most of us need to make some changes to prepare for a longer life.

Change Your Mindset About Work

We need to start by changing our mindset about working. Retirement needs to be thought of as more than just the end of your first career/working life at the age of 65 and moving into a life of leisure. If we plan to live to 100+, most of us will need to work past age 65 in some capacity. But can that allow us to work in the same career with a more flexible schedule, or start a business, or do something completely different — something we have always wanted to do, but didn’t feel we could take the risk when we were younger? This is the time to make our next phase of life your best phase of life, starting with making your work meaningful and challenging. For some, this may be by finding our purpose and passion and putting it to work first by finding a way to continue to support us financially a little longer than we originally planned; by doing this, we put ourselves in a better position to be financially independent for the full extent of our long lifespan. For others, this may mean putting our time and talent to work volunteering for causes that mean the most to us and giving back to our communities.

Change Your Mindset About Health

Making a priority of health and well-being is another change we must make if we are to thrive in our quest to live the 100+ life. In order to maintain overall well-being, the following are important steps you need to follow:

• See your doctor(s) regularly for check-ups and proactive testing and vaccinations.

• Maintain a healthy diet (learn to cook or purchase healthy meals if you don’t now).

• Drink plenty of water.

• Avoid unhealthy habits (smoking, drinking too heavily, etc.)

• Maintain a healthy weight.

• Maintain a regular sleep schedule (6 – 8 hours of sleep nightly is recommended).

• Maintain social engagement; avoid social isolation.

• Keep your mind active (continuous learning).

• Maintain a safe living environment.

• Get regular exercise, including cardio, weight training and stretching.

• Get fresh air as much as possible.

• Use stress reduction exercises, including meditation.

• Maintain good mental health; seek a therapist, if needed.

• Seek resources for care assistance, when/if needed.

Change Your Routine and Pursue Your Passions

Determine now what you will do in your next phase of life. When and if you do stop working (some of us will work in some capacity forever), what will you do that means something to you? What are the goals you want to accomplish during your lifetime that are meaningful, personally satisfying, and psychologically rich? All of these components need to exist in your mix of goals and it is important to have a good balance. To fill your life of 30+ years of retirement, you will need to come up with a long list of goals and activities to fill your years. Start now to think of the things you might want to accomplish and the timeframes in which you might want to accomplish them. List anything that you’d like to make happen - getting these wishes down on paper makes them that much more likely to happen! Your “wish list” may include:

• Travel to a particular destination.

• Writing that novel that you always said you’d write.

• Starting a non-profit or working for one that supports a cause that matters to you.

• Taking a mission trip.

• Taking a ride in a hot air balloon.

• Going back to school and getting your college degree.

• Visiting the town where your great grandmother was born in another country and starting to put together your family history.

There are so many possibilities! And the goals that are meaningful to you will be different than those that are meaningful to someone else. The sooner you get started, the better. None of us know our future health trajectory — so get working on those goals and make them happen while you can. The good news is, for many of us, the longer we stay mentally engaged, healthy, and active, the better chance we have to keep going strong!

Change Your Social Engagement

It seems that who we engage with as we age is important. First, stay engaged — with SOMEONE! Staying engaged with people from different generations is a key to staying active and healthy in your next phase of life. This engagement may come in the way of activities with the many generations of your family. Or it may come by being intentionally engaged with other generations — by where you choose to live, how and where you choose to volunteer, engage socially, etc.

Start now!

The 100+ life is truly something most of us should be thinking about, anticipating and planning for. How can we start planning now in order to have to have the most engaging, meaningful and healthy long life possible? One in which we thrive during our entire life, give back to ourselves and our communities in a meaningful way, and are able to support ourselves financially for our entire lifespans? Only by starting the planning process now and anticipating a long life can we be prepared. Work with your professional planning team to start designing your Longevity Plan now. Be prepared for your 100+ Life!

Sandra Adams, CFP®, is a Partner and CERTIFIED FINANCIAL PLANNER™ professional at Center for Financial Planning, Inc.® and holds a CeFT™ designation. She specializes in Elder Care Financial Planning and serves as a trusted source for national publications, including The Wall Street Journal, Research Magazine, and Journal of Financial Planning.

Securities offered through Raymond James Financial Services, Inc. Member FINRA/SIPC. Investment advisory services offered through Center for Financial Planning, Inc. Center for Financial Planning, Inc., is not a registered broker/dealer and is independent of Raymond James Financial Services.

Certified Financial Planner Board of Standards Inc. owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER™, CFP® (with plaque design) and CFP® (with flame design) in the U.S., which it awards to individuals who successfully complete the CFP Board’s initial and ongoing certification requirements.

Raymond James and its advisors do not offer tax or legal advice. You should discuss any tax or legal matters with the appropriate professional.

Any opinions are those of Sandra D. Adams, and not necessarily those of Raymond James.

The Challenges of Living Alone in Retirement

Contributed by: Sandra Adams, CFP®

Recently, an article in The New York Times titled "As Gen X and Boomers Age, They Confront Living Alone" has gained widespread attention. As a financial adviser, I have noticed a trend of more clients entering and living in retirement alone over the past five to ten years. This is a topic worth considering, as the number of people living alone in retirement is increasing.

The statistics speak for themselves. According to the U.S. Census Bureau, 36% of American households are currently occupied by single individuals aged 50 and older, a total of nearly 26 million people. This group has traditionally been more likely to live alone, and now that age group, including baby boomers and Gen Xers, makes up a larger share of the population than ever before. Additionally, changing attitudes towards gender and marriage have caused individuals aged 50 and older to be more likely to be divorced, separated, or never married. One in six Americans aged 55 and older do not have children, and because women tend to live longer than men, over 60% of older adults living alone are female.

The challenges of living alone in retirement are real. Here are the top 5 challenges and how to plan for them:

1. Living alone can lead to social isolation

According to the Census Bureau, a higher proportion of older women live alone in retirement. However, men are more vulnerable to the negative effects of solitary living, such as social isolation, which can increase the risk of health issues and a higher mortality rate. Those living alone and not engaging socially may be at risk for general, mental, and cognitive health problems. 

To combat the challenges of social isolation that come with living alone, it is important to make intentional plans. This is especially crucial for those who may not have children or many family members. Finding social groups to be a part of, whether in the community, through hobbies or volunteering, or with current or former colleagues, can keep you connected and engaged with the outside world.

2. Managing the home can become a challenge over time

According to a 2021 AARP study, over 90% of older adults want to continue living in their own homes during retirement. While this desire for comfort and privacy is entirely understandable, managing a home can be financially and physically overwhelming for single individuals as they age. If the home is not designed for "aging in place," it may become difficult to manage if the individual experiences health or mobility issues. To address these challenges, many single individuals may choose to:·

• Pay off their home before retirement. 

• Make home modifications in advance to accommodate future needs. 

• Build flexibility into their financial plan to pay for help with managing their home once they are unable to do so themselves.

3. Single retirees living alone have no built-in partner to be their advocate for estate planning purposes

Deciding on a power of attorney for financial affairs, patient advocate, successor trustee for a trust, and executor for a will can be difficult for single older adults, especially those with no children or family. Those with no family or close friends to ask for these roles may struggle with the decision. 

There are now professional advocates who can fill these roles, such as attorneys for financial power of attorney and successor trustee (or third-party financial and bank Trust departments that can serve as successor trustees), attorneys or geriatric care managers/social workers as patient advocates, and attorneys as executors. However, it is important to note that hiring professionals to serve in these roles requires advanced planning and incurs a cost.

4. Single retirees living alone have no built-in partner to care for them

According to the Department of Health and Human Services, someone turning 65 today has nearly a 70% chance of needing such long-term care in their remaining years. On average, women need care longer (3.7 years) than men (2.2 years). 

For those older adults who are part of a couple, they can avoid paying for professional care longer by caring for each other for some time. Single individuals living alone will likely need to pay for care needs from day one of their needs. One way to address this challenge is to prepare well in advance for this potential need by planning for long-term care needs. 

While you are still working, make sure that you have long-term disability insurance that covers the expense of potential care needs. For the costs that may occur in your retirement years, consider long-term care insurance and/or carve out a portion of your retirement savings earmarked for long-term care expenses. Have a plan for what you will do if you ever have a long-term care event, and have your plan in written form for your advocates. If you aren't able to live in your own home due to your future health, have a plan for where you might consider going and how that will be paid for.

5. From a financial aspect, single retirees rely only on one set of resources and assets

Single individuals living alone are in a unique financial situation. They have only themselves to rely on for the remainder of their lives. There is no spousal Social Security or pension to be a backstop on the income side. It is only their savings and assets that they have to rely on — no one else has anything to leave them. 

Financial planning needs to be very intentional to ensure they can support themselves for the remainder of their lives first and foremost. Planning for the goals of what they want to do and accomplish during their retirement years and for their potential long-term care needs is crucial.

Living single and alone in retirement is a choice, not without challenges. It is especially important for single individuals approaching retirement to work with the appropriate professionals to plan for their second stage in life. With proper planning, living alone and single and alone in retirement can be done successfully.

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A rising number of senior citizens live alone. Sandra Adams, CFP® offers ways to cope with the social and financial aspects of solo living. Watch the video version of the blog HERE!

Sandra Adams, CFP®, is a Partner and CERTIFIED FINANCIAL PLANNER™ professional at Center for Financial Planning, Inc.® and holds a CeFT™ designation. She specializes in Elder Care Financial Planning and serves as a trusted source for national publications, including The Wall Street Journal, Research Magazine, and Journal of Financial Planning.

Raymond James is not affiliated with and does not endorse the opinions or services of Karen Kurson or Retirement Daily.

The foregoing information has been obtained from sources considered to be reliable, but we do not guarantee that it is accurate or complete, it is not a statement of all available data necessary for making an investment decision, and it does not constitute a recommendation. Any opinions are those of Sandra D. Adams and not necessarily those of Raymond James.

Securities offered through Raymond James Financial Services, Inc. Member FINRA/SIPC. Investment advisory services offered through Center for Financial Planning, Inc.® Center for Financial Planning, Inc.® is not a registered broker/dealer and is independent of Raymond James Financial Services. 24800 Denso Drive, Ste 300 // Southfield, MI 48033 // (248) 948-7900

Certified Financial Planner Board of Standards Inc. owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER™, CFP® (with plaque design) and CFP® (with flame design) in the U.S., which it awards to individuals who successfully complete CFP Board's initial and ongoing certification requirements.

Raymond James and its advisors do not offer tax or legal advice. You should discuss any tax or legal matters with the appropriate professional.

How Doing Your Retirement Planning Can Put You in the Driver’s Seat

Contributed by: Sandra Adams, CFP®

I have had some fascinating conversations in meetings with prospective clients over the last several months. Most of these clients have never previously worked with a financial planner, choosing the DIY (“Do It Yourself”) route until now. And for most, now that they are within a few years of retirement, knowing if they truly have the assets and income resources to be able to retire and support themselves throughout their life expectancies is something they do not want to leave to chance.

Going through the in-depth retirement planning process with the assistance of a financial planning professional can help answer the many questions that so many clients have trouble answering on their own or can only guess without accurate analysis. Things like:

• When should I take Social Security (or when should each of us take Social Security if we are a married couple)?;

• When is the best time to draw pensions and/or should I take the lifetime income benefit (if I choose this option, do I take a straight life payout vs. a payout with a spousal benefit if I am married) vs. the lump sum payout from my pension benefit?;

• If I have an annuity(ies), should I use them for income during retirement, and when?;

• What accounts do I draw from, and when do I draw from them to pay the least amount of taxes during retirement?

• How will I pay for Long Term Care if I do not have Long Term Care insurance?

• And most importantly, will I be able to financially support the lifestyle I desire for as long as I may live without running out of money?

Many potential clients I have met recently have come in assuming they will need to work until they are at least 70 (the age of their maximum Social Security age). While they may value their work, in many cases, it has seemed apparent that there was a fair amount of stress involved with the work they are doing. Knowing whether the client could retire earlier than 70 and giving them the CHOICE about when they could retire would undoubtedly put them in the driver’s seat. Knowledge is power!

Doing your retirement planning earlier than later allows you to make the choices you want to make when you want to make them. Knowing where you stand financially, now and into the future, allows you to decide what you want to do and when you want to do it — you are the driver, and you choose the route to your retirement destination!

Sandra Adams, CFP®, is a Partner and CERTIFIED FINANCIAL PLANNER™ professional at Center for Financial Planning, Inc.® and holds a CeFT™ designation. She specializes in Elder Care Financial Planning and serves as a trusted source for national publications, including The Wall Street Journal, Research Magazine, and Journal of Financial Planning.

Opinions expressed in the attached article are those of Sandra D. Adams, CFP® and are not necessarily those of Raymond James. Securities offered through Raymond James Financial Services, Inc. Member FINRA/SIPC. Investment advisory services offered through Center for Financial Planning, Inc.® Center for Financial Planning, Inc.® is not a registered broker/dealer and is independent of Raymond James Financial Services.

Preparing an Emergency Action Plan

Contributed by: Sandra Adams, CFP®

Unknowns are a part of all of our lives, and the potential for the big "unknowns" becomes more significant as we age.

It is a best practice to have a full aging plan in place as we go into our retirement years. This includes:

• Where we might consider living as we age;

• Where, how, and whom we would consider having care for us as we age if we need care;

• How we will use our money, and whom it will go to once we are gone; and

• Who will help us with all of this if we cannot manage things as we age

An aging plan should also include an Emergency Action Plan. What is this, you may ask? It is the minimum provisions you should have in place in case an unexpected event occurs. Even if you don't have a full aging plan in place, an Emergency Action Plan is crucial. So, what should be part of an Emergency Action Plan?

• Name Advocates. By this, we mean having your Durable Power of Attorney in place for your financial affairs and your Patient Advocate Designation. If you have no one to name or if your family/friends' advocates need assistance, there are ways to have professional advocates in place to serve or assist (talk to your financial planner to discuss these options).

• Document Your Important Information in Advance. This includes your financial and health information so that your advocates are prepared to serve on your behalf without missing a beat. Our Personal Record Keeping Document is an excellent place to start this process.

• Communicate to Your Advocates that they have been named and verbally communicate your wishes. Your advocates can only make the best decisions for you and carry out your wishes if they (1) know they have been named your advocate and (2) are aware of the decisions you'd like to have made on your behalf.

Planning ahead is the best gift you can give yourself and your family. Having a full aging plan in place, but at a minimum, an Emergency Action Plan can put the pieces in place to allow for decisions to be made on your behalf in the way that you want them to. It can also provide resources for your best interests in your most critical time of need. If you need to put an Emergency Action Plan in place, ask your planner for assistance!

Sandra Adams, CFP®, is a Partner and CERTIFIED FINANCIAL PLANNER™ professional at Center for Financial Planning, Inc.® and holds a CeFT™ designation. She specializes in Elder Care Financial Planning and serves as a trusted source for national publications, including The Wall Street Journal, Research Magazine, and Journal of Financial Planning.

Opinions expressed in the attached article are those of Sandra D. Adams and are not necessarily those of Raymond James. Securities offered through Raymond James Financial Services, Inc. Member FINRA/SIPC. Investment advisory services offered through Center for Financial Planning, Inc.® Center for Financial Planning, Inc.® is not a registered broker/dealer and is independent of Raymond James Financial Services.

What is Retirees’ Biggest Fear?

Contributed by: Sandra Adams, CFP®

I recently attended a conference on aging where the presenter discussed the biggest fears of clients approaching and entering retirement. The question was posed to the audience, “What do you think the biggest fear of clients entering retirement is according to recent research?” As I thought about the possible answers given my interactions with clients, so many possibilities came to mind. The fear of running out of money, a detrimental stock market causing the loss of significant assets, or the loss of a spouse without being able to fulfill retirement goals. Then the speaker said very bluntly, “Alzheimer’s disease.” Wow!

It makes a lot of sense. The most current Alzheimer’s Association Facts and Figures report that 1 in 3 seniors pass away from Alzheimer’s or other dementia (more than breast cancer and prostate cancer combined). More than 6 million Americans are currently living with Alzheimer’s disease; that number has increased 145% over the last decade and 16% during the COVID-19 pandemic. In 2021, the cost to the nation of Alzheimer’s and other dementias was over $355 billion (that number is projected to be $1.1 trillion by 2050 if no cure is found).

Even more impactful to our clients and families, over 11 million Americans provide unpaid care for people with Alzheimer’s or other dementia; this includes an estimated 15.3 billion hours valued at nearly $257 billion. It’s no surprise that retirees’ biggest fear is Alzheimer’s, whether it’s getting the disease or becoming a caregiver to a spouse who gets the disease and having retirement derailed by an illness that currently has no cure.

Thinking about this from a financial planning and retirement planning perspective, there are likely two significant and very different issues. First and foremost is FOMO, or the Fear Of Missing Out. Alzheimer’s and related dementias most certainly steal many opportunities from clients’ to live out their ideal retirement; to enjoy the happy, HEALTHY next phase of life they always planned for. The fear of missing out on that if an Alzheimer’s dementia were received for one or both of a spousal couple is real, especially if that diagnosis comes early in retirement.

Second, and most significant, is the financial impact of an Alzheimer’s diagnosis on the overall retirement plan. In 2019, the Alzheimer’s Association reported that the average lifetime cost for caring for a person with dementia was $357,297. For most clients without a Long Term Care plan or Long Term Care insurance, these costs could certainly be detrimental to their overall retirement plan.

Planning in advance of a diagnosis is always recommended. So, what are some specific action items that might be recommended?

• Consider Long Term Care before retirement (the longer you wait, the more expensive solutions can be, and the more likely you can become uninsurable).

• Seek the advice of a team consisting of a financial advisor, estate planning/elder law attorney, and a qualified tax professional to formulate the best possible future long-term care funding strategy. This is often the best defense against the attack of a disease that can significantly impact your plan in the future.

• Plan to have a family discussion about your long-term care plan to ensure your family is aware of your wishes and their potential roles in your plan. Have a facilitator guide the meeting if you feel that might make the meeting run smoother. 

“Thinking will not overcome fear, but action will.” W. Clement Stone

Planning ahead and preparing is your best defense against your fears. If you have not yet started planning for your aging future or your potential long-term care needs in retirement, there is no time like the present. Reach out to your financial advisor to develop a team of professionals and start planning today!

Sandra Adams, CFP®, is a Partner and CERTIFIED FINANCIAL PLANNER™ professional at Center for Financial Planning, Inc.® and holds a CeFT™ designation. She specializes in Elder Care Financial Planning and serves as a trusted source for national publications, including The Wall Street Journal, Research Magazine, and Journal of Financial Planning.

Investing involves risk and you may incur a profit or loss regardless of strategy selected, including diversification and asset allocation. Raymond James is not affiliated with Sandra D. Adams, CFP®. The cost and availability of Long Term Care insurance depend on factors such as age, health, and the type and amount of insurance purchased. These policies have exclusions and/or limitations. As with most financial decisions, there are expenses associated with the purchase of Long Term Care insurance. Guarantees are based on the claims paying ability of the insurance company.

Securities offered through Raymond James Financial Services, Inc., member FINRA/SIPC. Investment advisory services are offered through Center for Financial Planning, Inc. Center for Financial Planning, Inc. is not a registered broker/dealer and is independent of Raymond James Financial Services.

Save Some Bucket List Items for Your Own

Contributed by: Sandra Adams, CFP®

As parents, it's not uncommon for us to want to give our children more than we had when we were growing up. Whether that be more or better extra-curricular experiences, the camps our parents couldn't afford to send us to, the Florida senior trip with a friend, or the international summer travel experience or internship in college that we missed out on when we were young. Kids now seem to have so many opportunities that weren't available to us when we were growing up. Not only because they may not have been offered back then, but also because we're willing to help pay for them to give our children those experiences now — but at what cost?

As a financial planner, I work with clients annually to determine if their goals to give their children these valuable experiences fit within their ongoing cash flow and don't impact their long-term financial goals. As you can imagine, the real risk is trying to provide every opportunity to your children that you may have missed out on (and maybe even those that you still wish you could do yourself) and potentially compromising your financial future. And besides the financial aspect, you also risk having bad feelings towards your children without realizing it. When they're doing the things you always wished you could do, you may run out of time or money to do those things in your own retirement. As one client said to me in a meeting, "One day, I thought in my head – "Hey, step off my bucket list!"

There's always a fine line between what we do for our children now and what we save for our own financial futures later. Our job is to give our children a good education, our love, and a solid financial start to their future. Our next biggest job is to make sure that we've saved enough to support ourselves so that we don't have to rely on our children at any point in time. If we've done both of those things, we've done our jobs as parents. And, if we've provided some enjoyment for our children and saved some bucket list items for ourselves to enjoy — even better!

Sandra Adams, CFP®, is a Partner and CERTIFIED FINANCIAL PLANNER™ professional at Center for Financial Planning, Inc.® and holds a CeFT™ designation. She specializes in Elder Care Financial Planning and serves as a trusted source for national publications, including The Wall Street Journal, Research Magazine, and Journal of Financial Planning.

Any opinions are those of Sandra D. Adams, CFP® and not necessarily those of Raymond James. Securities offered through Raymond James Financial Services, Inc., member FINRA/SIPC. Investment advisory services are offered through Raymond James Financial Services Advisors, Inc.

How to Find the Right Retirement Income Figure for You

Contributed by: Sandra Adams, CFP®

A big part of the planning work that we do is planning for future retirement. Simply put, how much income will you need each year to support the expenses you will have in retirement, and what income sources and assets will you have once you get there to support those needs throughout your lifetime.

For many clients, they have an accurate calculation of the income they will need. This is based on what expenses they have pre-retirement adjusted by the expenses that will go away (like mortgages, employment-related expenses, etc.), and those that may increase (like travel, those related to additional hobbies, etc.). For other clients, coming up with a future retirement income need is truly a wild guess. They may not have a good handle on what they spend now, and knowing what they need in retirement is even more of a mystery to them. So, where should you start to develop your correct retirement income figure?

First, we suggest tracking expenses before retirement to determine your average monthly spending. We suggest using a budget tracking tool to track spending for two or three months at least a couple of times, during different times of the year, to catch irregular expenses and trends. Once you feel that you have a good handle on your average income needed monthly, you can estimate your annual need. This method also helps you understand WHERE you are spending and where that might change once you retire. You can also develop an annual expense need estimate by backing into it. For example, start with your gross salary and subtract what you pay in taxes and save to 401k or other savings vehicles. You can generally assume what is left is going towards spending. However, this method will not tell you where you are spending and how it will change. Now, we at least have a number to start with for our planning projections.

Next, I often suggest that clients very close to retirement try living on their future retirement income BEFORE they retire to see if it feels comfortable. For instance, I have had clients live on just one of a couple’s salary to see if they could do it without feeling like they were denying themselves. Trying to live on the amount you are planning on living on in future retirement, even for a few months, gives you a taste of your future reality. If it feels comfortable, you likely have the correct number. However, if you feel like you are denying yourself and completely changing how you live, perhaps you need to go back to the drawing board and plan for a different income goal to see if that is possible. Not planning for the retirement you want from the beginning will only set you up for years of retirement planning. Why not see if the retirement you want is possible by starting with the right retirement income number?

When it comes to retirement income, you do not want to guess the number. It is worth your time and effort to come up with the most accurate number for you to meet your ideal retirement goals. Retirement planning projections are only as good as the assumptions we use. If we are not using the right assumptions, especially the right number for your retirement income, the projections for your retirement success will not be as accurate as you want them to be.

Work with your financial planner to find the tools you need to come up with YOUR most accurate retirement income need, and then make sure your plan can support those needs. We want you to have the most successful retirement possible!

Sandra Adams, CFP®, is a Partner and CERTIFIED FINANCIAL PLANNER™ professional at Center for Financial Planning, Inc.® and holds a CeFT™ designation. She specializes in Elder Care Financial Planning and serves as a trusted source for national publications, including The Wall Street Journal, Research Magazine, and Journal of Financial Planning.

This material is being provided for information purposes only and is not a complete description, nor is it a recommendation. Any opinions are those of Sandra D. Adams, CFP® and not necessarily those of Raymond James.

Five Important Financial Questions to Ask Yourself Going into 2022

Contributed by: Sandra Adams, CFP®

Once again, a new year is upon us. Rather than start the year with financial New Year’s Resolutions that we are doubtful to keep, why not simply start by asking ourselves some important financial questions, answering them honestly, and taking some action steps in response? Here are the five questions we recommend asking to get your year started on the right foot:

1. What are the top financial goals you want to accomplish in 2022 (and do they align with what you value most)? 

Prioritizing what you want to accomplish and ensuring it is in line with what you value most is the first key to financial success. Once you have set your goals, you can put into motion just how to get there.

2. How can I accomplish my financial goals and save more? 

Most likely, many of your financial goals involve having money saved to meet them. Whether it be a large family vacation, paying off a mortgage, or making a certain amount of progress towards a significant life goal like retirement, most goals involve accumulating money. The beginning of the year is an excellent time to determine your financial budget and set aside funds for these goals. Make sure to keep in mind the new retirement plan contribution limits for 2022 and budget savings outside of retirement accounts for short-term goals and debt payoffs.

3. Does my investment strategy match my goals?  

The beginning of the year is always a good time to review your Investment Policy Statement. In return, you can determine if your investment strategy is still in line with your short and long-term financial goals and make sure that you are not taking too much or too little of a risk for the goals you have in mind for YOUR specific plan.

4. Am I financially protecting my loved ones? 

It makes sense to continually review your plan to ensure that your goal is solid from a risk perspective. Each year, you should review all of your insurance protections, including life insurance, disability insurance, liability insurance (home and auto), and possible long-term care insurance, to ensure that your family is fully protected.

5. Am I being financially safe/smart around potential financial credit and fraud risks? 

With electronic and internet transactions posing threats to our financial safety, it is important to be aware of precautions to take when transacting business electronically, having credit and fraud monitoring services in place, and proactively monitoring your credit report regularly. If you don’t have a credit and/or fraud monitoring service, you should likely have something in place (ask your advisor for recommended services).

Asking these quick questions and taking the action steps to answer them will get you on the right footing to a successful 2022. For assistance with any of these items, reach out to your financial advisor — we are always willing to help!

Sandra Adams, CFP®, is a Partner and CERTIFIED FINANCIAL PLANNER™ professional at Center for Financial Planning, Inc.® and holds a CeFT™ designation. She specializes in Elder Care Financial Planning and serves as a trusted source for national publications, including The Wall Street Journal, Research Magazine, and Journal of Financial Planning.

This material is being provided for information purposes only and is not a complete description, nor is it a recommendation. Any opinions are those of Sandra D. Adams, CFP® and not necessarily those of Raymond James.

The Key To Financial Planning Is Sticking to the Basics!

Contributed by: Sandra Adams, CFP®

A colleague of mine and I were recently presenting a session on Savings for Junior Achievement for a Detroit High School class as part of The Center’s Financial Literacy initiatives. As part of our presentation, we both shared personal stories about how the fundamentals of budgeting and savings had personally impacted us during our earlier years. Why am I sharing this with you?

First, it was a good reminder that our perspective about money certainly changes over time. Thinking back, I now realize that how I think about money now is certainly different than how I thought about money in my teens and twenties. This is important especially when we are talking to our children and grandchildren about handling money.

Second, it was a good reminder that our experience teaches us good lessons. The things we have been through over our lifetimes, especially with money, sticks in our minds either positively or negatively. Positive experiences and behaviors we will tend to repeat and negative experiences and behaviors we hopefully will learn from and NOT repeat. Although some people take longer to learn than others.

Third, and most importantly, I was reminded with my own story that sticking to the financial planning basics works.

The Basics Are:

• Paying yourself first. (Building savings to yourself right into your budget!)

• Living within your means (spending first for needs and then for wants; spending for wants only if there is money in the budget).

• Building a savings reserve for emergencies.

• Building savings in advance for short-term goals.

• Not accumulating debt that is not needed and paying off any credit in the money that it is accumulated.

• And once you can do all that, building long-term savings for long-term goals like buying a house and retirement.

At one point in my life, I was in a real financial hole, but by sticking to the basics and having a lot of patience, I slowly dug myself out. And I sit here today being able to say that by following the fundamentals, you can be financially successful.  Sticking to the basics works!

Sandra Adams, CFP®, is a Partner and CERTIFIED FINANCIAL PLANNER™ professional at Center for Financial Planning, Inc.® and holds a CeFT™ designation. She specializes in Elder Care Financial Planning and serves as a trusted source for national publications, including The Wall Street Journal, Research Magazine, and Journal of Financial Planning.