Medicare Open Enrollment

Contributed by: Kali Hassinger, CFP®

As the weather changes and fall begins, there seems to be a general shift from the summer mindset to a more focused fall mentality.  Maybe it’s because, even well into adulthood, we’re accustomed to that “back-to-school” switch.  If you are currently enrolled in Medicare (not quite school, but significant nonetheless!), fall will continue to mark an important time of year because the Medicare open enrollment period begins on October 15th and lasts until December 7th.  This is the time when Medicare participants can update their health plans and prescription drug coverage for the following year. 

If you participate in a Medicare health and/or prescription plan, it’s important to be sure that your coverage will continue to meet your needs in the year to come.  Plans will send out notification materials if coverage is changing, but, even if it isn’t, it may be worth comparing your current coverage to other options.  If you are thinking of updating your coverage, there are several items that you should consider. 

Other coverage options:

If you are currently covered by or eligible for coverage through another provider, such as your former employer, you’ll want to understand how this plan works with Medicare.  Most retiree plans are designed to coincide with Medicare for those 65 and older, but you’ll want to be sure that the premiums and plan benefits are more advantageous than the open market Medicare options.

Cost:

This may seem like a given, but there are several cost factors to take into consideration.  Premiums, deductibles, and other costs can add up throughout the year, so it’s important to have a grasp of the plan’s monthly AND annual expenses.

Accessibility: 

Are the doctors and pharmacies who participate in this plan convenient for you?  If you have a current doctor or pharmacy that you want to continue using, be sure that they are in network.

Quality of Coverage:

Perhaps another seemingly obvious but important consideration, quality of coverage means how well does the plan actually cover the services you need.   Some plans require referrals and limit (or won’t provide) coverage if you go out of network.  If you have ongoing prescriptions, make sure the drugs are covered and that you understand any rules that may affect your prescription in the future.  

It’s important to understand and compare your Medicare options, but it’s easy to be overwhelmed by the process.  Raymond James partners with a group called Health Plan One to help clients strike the right balance between appropriate coverage and healthcare costs.  Our office has the opportunity to host a webinar with HPOne on October 23rd at 1:00 PM, and you can register for the webinar by clicking here.

Kali Hassinger, CFP® is an Associate Financial Planner at Center for Financial Planning, Inc.®

Planning for Health Insurance and Medical Expenses in Retirement

Contributed by: Matt Trujillo, CFP®

At any age, health care is a priority. However, when you retire, you will probably focus more on health care than ever before. Staying healthy is your goal, and this can mean more visits to the doctor for preventive tests and routine checkups. There's also a chance that your health will decline as you grow older, increasing your need for costly prescription drugs or medical treatments. That's why having the right health insurance for you is extremely important.

If you are 65 or older when you retire, your worries may lessen when it comes to paying for health care--you are most likely eligible for certain health benefits from Medicare, a federal health insurance program available upon your 65th birthday. But if you retire before age 65, you'll need some way to pay for your health care until Medicare kicks in. Generous employers may offer extensive health insurance coverage to their retiring employees, but this is the exception rather than the rule. If your employer doesn't extend health benefits to you, you may need to buy a private health insurance policy (which may be costly), extend your employer-sponsored coverage through COBRA, or purchase an individual health insurance policy through either a state-based or the federal health insurance Exchange Marketplace.

But remember, Medicare won't pay for long-term care if you ever need it. You'll need to pay for that out of pocket, rely on benefits from long-term care insurance (LTCI), or if your assets and/or income are low enough, you may qualify for Medicaid.

As mentioned, most Americans automatically become entitled to Medicare when they turn 65. In fact, if you're already receiving Social Security benefits, you won't even have to apply--you'll be automatically enrolled in Medicare. However, you will have to decide whether you need only Part A coverage (which is premium-free for most retirees) or if you want to also purchase Part B coverage. Part A, commonly referred to as the hospital insurance portion of Medicare, can help pay for your home health care, hospice care, and inpatient hospital care. Part B helps cover other medical care such as physician care, laboratory tests, and physical therapy. If you want to pay fewer out-of-pocket health-care costs, you may also choose to enroll in a managed care plan, or private fee-for-service plan under Medicare Part C (Medicare Advantage). If you don't already have adequate prescription drug coverage, you should also consider joining a Medicare prescription drug plan offered in your area by a private company or insurer that has been approved by Medicare.

Medigap Policies:

Unfortunately, Medicare won't cover all of your health-care expenses. For some types of care, you'll have to satisfy a deductible and make co-payments. That's why many retirees purchase a Medigap policy.

Unless you can afford to pay for the things that Medicare doesn't cover, including the annual co-payments and deductibles that apply to certain types of care, you may want to buy some type of Medigap policy when you sign up for Medicare Part B. There are 10 standard Medigap policies available. Each of these policies offers certain basic core benefits, and all but the most basic policy (Plan A) offer various combinations of additional benefits designed to cover what Medicare does not. Although not all Medigap plans are available in every state, you should be able to find a plan that best meets your needs and your budget.

When you first enroll in Medicare Part B at age 65 or older, you have a six-month Medigap open enrollment period. During that time, you have a right to buy the Medigap policy of your choice from a private insurance company, regardless of any health problems you may have. The company cannot refuse you a policy or charge you more than other open enrollment applicants.

Long-term care insurance and Medicaid:

The possibility of a prolonged stay in a nursing home weighs heavily on the minds of many older Americans and their families. That's hardly surprising, especially considering the high cost of long-term care.

Many people in their 50s and 60s look into purchasing Long Term Care Insurance (LTCI). A good LTCI policy can cover the cost of care in a nursing home, an assisted-living facility, or even your own home. If you're interested, don't wait too long to buy it--you'll need to be in good health. In addition, the older you are, the higher the premium you'll pay.

You may also be able to rely on Medicaid to pay for long-term care if your assets and/or income are low enough to allow you to qualify. But check first with a financial professional or an attorney experienced in Medicaid planning. The rules surrounding this issue are numerous, complicated and can affect you, your spouse, and your beneficiaries and/or heirs.

The issue of how to properly plan for health insurance in retirement is complex and multi-faceted. As with many aspects of good financial health I recommend working with a qualified professional to address your evolving health care needs, and to ensure that you and your family have the proper coverage for your circumstances.

Matthew Trujillo, CFP®, is a Certified Financial Planner™ at Center for Financial Planning, Inc.® Matt currently assists Center planners and clients, and is a contributor to Money Centered.

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This information has been obtained from sources considered to be reliable, but we do not guarantee that it is accurate or complete. Long Term Care insurance policies have exclusions and/or limitations. The cost and availability of Long Term Care insurance depend on factors such as age, health, and the type and amount of insurance purchased. 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.

Is it Time for You to “Come Clean” with Your Financial Planner?

Contributed by: Sandra Adams, CFP®, CeFT™

Recently, I had an awakening experience with a long time client.  For years, my client has been very focused on investment returns and fees.  We began working together during the downturn in 2008 (he had been with the firm, but working with another planner for years before that).  This client is always worried about losing too much or not taking enough risk; when in reality, he needs no more than his current risk profile to help reach his goals.  I struggle to find ways to prove to him how solid his financial and investment plan is.

During our recent meeting, our conversation took a different turn than conversations of the past.  He got very emotional and disclosed to me that money really makes him very anxious.  He went on to tell me about some very personal things that have happened in his past, both with personal relationships and in his business life that made him distrust his ability to make good financial decisions.  To this day, he still gets nervous about every financial decision, and is never sure he is making the right one – he is always waiting for the something to go horribly wrong. 

Our meeting lasted much longer than normal and he apologized for “breaking down”.  I, in turn, thanked him for giving me the profound insight I needed to serve him better as his planner.  I now understand his view of money, and can find ways to address his fears and anxieties like I never could have before.  I thanked him for having enough trust in me to share his story.

Many of us have “money” stories that are not kind – those that cause us to feel fear and anxiety, and those that may still interfere with our ability to make rational financial decisions. 

If you have things in your history that you feel impact your financial decision making, share them with your financial planner.  With the understanding of your money fears, your financial planner will be able to assist you, on an even deeper level, in making the best financial decisions for your future.

Sandra Adams, CFP® , CeFT™ is a Partner and Financial Planner at Center for Financial Planning, Inc.® Sandy specializes in Elder Care Financial Planning and is a frequent speaker on related topics. In addition to her frequent contributions to Money Centered, she is regularly quoted in national media publications such as The Wall Street Journal, Research Magazine and Journal of Financial Planning.

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Any opinions are those of Sandra D. Adams and not necessarily those of Raymond James. Every investor's situation is unique and you should consider your investment goals, risk tolerance and time horizon before making any investment. Prior to making an investment decision, please consult with your financial advisor about your individual situation.

Managing our Minds as We Age

Contributed by: Matthew E. Chope, CFP®

I recently read an article about cognitive decline as we age.  The article shocked me and made me realize why a strong partnership with a good financial planner can be absolutely vital as we get older.  The research article by Michael Finke, John Howe, and Sandra Huston called “Old Age and the Decline in Financial Literacy” describes the situation well. The authors provided a financial literacy test to older populations and found that while financial literacy tends to decline by about 1% per year after age sixty, financial confidence remains the same.  The chart below illustrates this dangerous paradox:

Source: retriementresearcher.com, August 4, 2017

One of our most important responsibilities as financial planners is to make sure that our clients are thoughtful about their financial decisions.  We consider ourselves managers of risk even more than managers of return, especially for our older clients.  This is paramount in what we do because many clients are focused more on matters of living – health, family, etc. – than on diving into the details of their investments or retirement cash flow in order to know their best path forward. 

As I was reading the article about the average confidence vs. literacy I was stunned at the widening differential gap between financial literacy and financial confidence. The gap at age 70 was 15% but widened to over 40% by age 80! This gap is where people become permanently financially damaged by poor decisions.  Most of the work we do is focused on helping reduce the probability of poor decisions.  It’s akin to the doctors Hippocratic Oath, “first do no harm”.  Our goal is not to make people rich, but to structure a solid foundation to ensure our clients never become destitute.

Here are some questions to consider:

• Do you have the time, energy, interest, knowledge, and desire to implement all kinds of financial decisions on your own? Do you enjoy financial planning?

• Will you overcome the inertia of inaction to put together all the various pieces needed to create and implement an effective and coherent overall plan?

• Will you continue to periodically update your plan?

• Have you determined how to make sure your planning will be maintained properly if other family members need to take control of it?

• Are you working with a financial planner who does more than just manage investment portfolios – who helps you with all aspects of your financial picture -- and helps you to implement suitable financial planning decisions?

If the answer to any of these questions is “I’m not sure” or “no,” please reach out to a Certified Financial Planner™ professional to discuss how they can help.

Matthew E. Chope, CFP ® is a Partner and Financial Planner at Center for Financial Planning, Inc.® Matt has been quoted in various investment professional newspapers and magazines. He is active in the community and his profession and helps local corporations and nonprofits in the areas of strategic planning and money and business management decisions.

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The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. Any opinions are those of Matt Chope and not necessarily those of Raymond James. There is no guarantee that these statements, opinions or forecasts provided herein will prove to be correct. Investing involves risk and you may incur a profit or loss regardless of strategy selected. Prior to making an investment decision, please consult with your financial advisor about your individual situation.
Source: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1948627

The Importance of Being Involved In Your Parents’ Financial Planning in Later Life

Contributed by: Sandra Adams, CFP®, CeFT™

There are a million reasons why we don’t talk to our parents about their financial situation…

• “I don’t want to be nosy.  What if I offend them by asking them about something so personal?”

• “What if they think I am asking because I don’t think they can handle their finances any longer?”

• “I have my own problems to deal with. I am not going to bother trying to handle my parents’ issues, too.”

• “I don’t need to know anything until they tell me, or until they’re gone.”

• And, the list goes on and on. 

And some of our parents may have their own hesitations about offering information to their adult children:  fear of loss of control, not wanting their children to be aware of all of their financial resources for fear that they will want/need more from them before they are able to give it, or simply discomfort with the conversations that may be involved about their own longevity and/or mortality.  However, in my experience, the majority of older adult clients are more than willing to begin to invite adult children, (at least those that are will be in charge of assisting with financial affairs in the case of incapacity or after death), into meetings to help them get a better understanding of the overall financial and estate planning picture.  We strongly encourage this with our clients and their adult children!

Some of the strongest and most successful family relationships we have are with generations of families that take advantage of these kinds of meetings.  Not only do they give us an opportunity to meet the family members that we will be working with if and when anything ever happens to mom and dad, but a number of additional items are uncovered during the annual meetings that can be extremely beneficial for the families:

• They can develop a strong understanding of the overall financial status and financial plan

• They have conversations about long term care planning, and reveal mom and dad’s preferences on how the finances fit into the plan

• They have conversations about the overall estate plan and structure (who will be in charge, the flow of the estate, etc.)

• They have conversations about charitable giving and its importance during life and after death

• They have conversations about how they wish their assets to be passed on to future generations (how, why, etc.)

It has been an amazing experience for many of our families, some of whom have grown so much closer through the experience.  If you have older adult parents and have hesitated to get involved or been afraid to approach the subject and need help getting started, please reach out.  We are happy to help!  We promise it will be worth the effort.

Sandra Adams, CFP® , CeFT™ is a Partner and Financial Planner at Center for Financial Planning, Inc.® Sandy specializes in Elder Care Financial Planning and is a frequent speaker on related topics. In addition to her frequent contributions to Money Centered, she is regularly quoted in national media publications such as The Wall Street Journal, Research Magazine and Journal of Financial Planning.

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Any opinions are those of Sandra D. Adams and not necessarily those of Raymond James. Every investor's situation is unique and you should consider your investment goals, risk tolerance and time horizon before making any investment. Prior to making an investment decision, please consult with your financial advisor about your individual situation.

Webinar in Review: A Beginners Guide for Those Just Starting Out

Contributed by: Emily Lucido

With a little bit of wit and a whole lot of information, Kali Hassinger, CFP® and Josh Bitel, Client Service Associate, recently presented a webinar that provided young folks with a broad guide for how to start their financial lives off on the right foot. As we found out during the presentation, making smart choices early can make life easier in the long run.

Although Millennials have an average debt of 50% in just student loans, they are doing better than most people might think. About 80% have a budget and 72% are saving for retirement. (Source: http://bit.ly/2bBC3vG). If you are a Millennial and are reading and thinking, “I’m not saving for retirement and I don’t have a budget,” that’s okay! Even by taking small steps now, you can make a huge difference rather than waiting. There are a lot of different factors to think about when tackling financials in the “real world.” The first step is to get organized.

Spending vs. Saving

You can spend smarter by following these tips below:

• Stay Organized - which can include setting up account notifications & alerts

  • These notifications can be set up for when you complete a transaction, or if your balance falls below a specific amount (you can set the minimum balance amount yourself)

  • The notifications can also be good for detecting fraud

• Applications & Technology

  • There are a ton of free apps out there that can help with any situation, just google your need and you can find something suitable for you

• Figuring out your Credit Score

  • Credit Karma gives you free access to your credit score and is highly secure

  • What determines your credit score?
    ~ Check out our blog that breaks down your credit score composition!

  • When building credit and using credit cards, you want to make sure to use only around or below 30% of your available credit

  • Watch for annual fees on credit cards; see if opening the card is worth the annual fee you will end up paying

  • Set up auto pay on all your bills with your credit card to benefit with cash back and rewards

  • To avoid ATM fees, go to the store and buy something small (like a pack of gum) and then get cash back on that purchase

• Student Loans

  • Student loans are something you want to start paying down right away – and if you can make more than just the minimum payment, try to do that

  • Make sure your payments are being allocated toward your highest interest loan

  • A good resource to show you every student loan you have, whether federal or private is, Annualcreditreport.com

Saving is so important, and to start sooner can make such a big difference in the long run. These tip s help with how to smartly save money:

• Cash Savings

  • In case of emergency it’s good to have six months of living expenses in a savings account

• Investing Early

  • The graph below demonstrations how investing your savings early can really benefit you in the long run

  • In the example below Chloe started investing from age 25 and almost reaches $2 million dollars by the age of 65, while we see Noah saves from age 25 (the same amount of money) and just let it sit in cash and only obtained about $653,000 by the age of 65.

• Retirement Savings

  • Although retirement might seem far away, it is important to be forward thinking and plan ahead

  • Employer plans are a great opportunity to save money if your company offers one - always remember to contribute at least the match if you can

• If your employer doesn’t offer a retirement plan you can still invest through a Roth IRA or Traditional IRA. Depending on your situation a Roth or an IRA could work for you.

• Taxes – some quick tips

  • The more money you make, the more you pay in taxes!

  • You can write off student loan interest of up to $2,500 per year

  • TurboTax® is a great online resource for doing your taxes with a 100% accurate calculation guarantee

• Insurance

  • Insurance is something that is so important – but something that can be overlooked when we are young

  • Staying on your parents health coverage until age of 26 is great – but don’t just assume it’s the best option because you aren’t paying anything

  • Remember to get renters insurance when living in an apartment – you never know when you might need it!

The last thing to remember is the 28/36 Rule. Your housing expenses should not exceed 28% of your gross monthly income while your total debt payments should not exceed 36%. Remember, the earlier you start saving the better – and any place you start at is good.

Take 30 minutes to view the webinar below and get the full details of Kali and Josh’s discussion. If you have any questions, please reach out to us -- we’re here to help!

Emily Lucido is a Client Service Associate at Center for Financial Planning, Inc.®

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The information contained in this blog does not purport to be a complete description of the securities, markets, or developments referred to in this material. The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. Any opinions are those of Emily Lucido and not necessarily those of Raymond James. There is no guarantee that these statements, opinions or forecasts provided herein will prove to be correct. You should discuss any tax or legal matters with the appropriate professional. Prior to making an investment decision, please consult with your financial advisor about your individual situation. Links are being provided for information purposes only. Raymond James is not affiliated with and does not endorse, authorize or sponsor any of the listed websites or their respective sponsors. Raymond James is not responsible for the content of any website or the collection or use of information regarding any website's users and/or members.

Retirement Planning: Roth 401k vs Traditional 401k

Contributed by: Kali Hassinger, CFP®

With our country’s ever-changing tax policies, we are left to hypothesize what taxation will look like in the coming years. Striking the right balance between taxation now and taxation during retirement is complicated, but a recent study has shown that it may not significantly affect our overall savings behaviors. Since 2006, employers have had the option to offer Roth 401ks to employees, and approximately 49% of employers now include this option as part of their incentive package. 

Roth 401ks effectively remove a large portion of the taxation mystery because all employee contributions are made on an after-tax basis. That means that you pay the tax today at the current and stated rate, but, assuming you wait until 59 ½ and have held the account for five years, all withdrawals are tax-free. All employer matches and contributions, however, are still made on a before-tax basis, so there will still be a tax liability for those future withdrawals.

The Harvard Business School study compared the current and previous savings rates of employees who were given the option to contribute to a Roth 401k and a traditional before-tax 401k. Somewhat surprisingly, there were no significant changes or differences between the before-tax 401k and Roth 401k savings rates. It would be easy to assume that Roth 401ks would have a lower contribution rate because current taxes would eat away at the employee’s ability to save. However, it instead appears that employees continued to use the same savings rates as before-tax 401ks, effectively reducing their current cash flow. Although the participant will pay more tax today, they will have greater purchasing power during retirement. 

The study also touched on the significant participation rate differences between 401k plans that automatically enrolled employees and those that didn’t. With an automatic enrollment plan, unless they choose otherwise, the employee will contribute at least the plan’s default deferral percentage. The lowest participation rate in the studied auto-enroll plans was 90%, while the highest participation rate for a non-enrollment plan (meaning the employees had to manually choose to participate) was 64%.

The study itself didn’t address the question of which type of 401k contribution is more beneficial from a tax or long-term standpoint, but a Roth 401k would inarguably have more purchasing power than a traditional 401k with the same balance. Regardless of what your current retirement plan offers, you can feel confident knowing that both before-tax and Roth 401ks can provide a secure retirement when paired with solid and strategic planning.

Kali Hassinger, CFP® is an Associate Financial Planner at Center for Financial Planning, Inc.®

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This 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 complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation. Opinions expressed are those of Kali Hassinger and are not necessarily those of Raymond James. Investing involves risk, investors may incur a profit or loss regardless of the strategy or strategies employed. Every investor's situation is unique, you should consider your investment goals, risk tolerance and time horizon before making any investment decision. Prior to making an investment decision, please consult with a financial professional about your individual situation.

Sources: http://www.hbs.edu/faculty/Publication%20Files/front-loading_taxation_b10a2f45-48ff-45ff-9547-99039cf8e9da.pdf

https://www.wsj.com/articles/roth-vs-traditional-401-k-study-finds-a-clear-winner-1497233040?mod=e2fb&mg=prod/accounts-wsj

Preparing for Retirement: How Much Fixed Income Should I Have?

Contributed by: Nick Defenthaler, CFP®

How much guaranteed income (i.e., Social Security, pension and annuity income) should I have in retirement? This is a question I hear quite often from clients who are nearing, or entering, retirement and are seeking our guidance on how to create a tax-efficient and well-diversified retirement paycheck. 

“The 50% Rule”

Although every situation is unique, in most cases, we want to see roughly 50% or more of a retiree’s spending needs satisfied by fixed income. For example, if your goal is to spend $140,000 before-tax (gross) in retirement, ideally, we’d want to see roughly $70,000 or more come from a combination of Social Security, pension, or an annuity income stream. 

Below is an illustration we frequently use with clients to help show where their retirement paycheck will be coming from. The chart also displays the portfolio withdrawal rate to give clients an idea if their desired spending level is realistic or not over the long-term.

Cash Targets

Once we have an idea of what is required to come from your actual portfolio to supplement your spending goal, we’ll typically leave 6 – 12 months (or more depending of course on someone’s risk tolerance) of cash on the “sidelines” to help shield these funds from volatility and ensure money available for your short term cash needs. Believe it or not, since 1980, the average intra-year market decline for the S&P 500 has been 14.1%. Over the course of those 37 years, however, 28 of them have ended the year in positive territory (source:  JP Morgan).  We believe market declines are imminent, and we want to plan ahead to help mitigate their potential impact. By having cash available at all times for your spending needs, it allows you to still receive income from your portfolio while giving it time to “heal” and recover – something that typically occurs within a 12 month time frame. 

As you enter the home stretch of your working career, it’s very important to begin dialing in on what you’re actually spending now compared to what you’d like to spend in retirement. Sometimes the numbers are very close but often times, they are quite different.  As clients approach retirement, we work together to help determine this magic number and provide analysis on whether or not the spending goal is sustainable over the long-term. From there, it’s our job to help re-create a retirement paycheck for you that meets your own unique goals. Don’t hesitate to reach out if we can ever offer a first or second opinion on the best way to create your own retirement paycheck.

Nick Defenthaler, CFP® is a CERTIFIED FINANCIAL PLANNER™ at Center for Financial Planning, Inc.® Nick works closely with Center clients and is also the Director of The Center’s Financial Planning Department. He is also a frequent contributor to the firm’s blogs and educational webinars.

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Opinions expressed are those of Nick Defenthaler, CFP®, and are not necessarily those of Raymond James. There is no assurance the forecasts provided herein will prove to be correct. This information has been obtained from sources deemed to be reliable but we do not guarantee that it is accurate or complete. This information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation. The S&P 500 is an unmanaged index of 500 widely held stocks that is generally considered representative of the U.S. stock market. Please note direct investment in any index is not possible. Annuity guarantees are subject to the issuing company's ability to pay for them.

Ford Buyout: Knowing your Options

Contributed by: Nick Defenthaler, CFP®

Over the past month, Ford has extended buyout offers to nearly 15,000 of its salaried employees. The offer, in most cases, contains two main components – a severance package or an enhancement of your retirement benefit from Ford.  Below is a high-level breakdown of some of the key points of the offer:

Special Incentive Program (SIP) and Select Retirement Program (SRP)

• Up to 18 months’ severance

• Retirement benefit enhancement

  • Credit for three additional years of age and three years of service for calculating benefits under the General Retirement Plan (GRP), Benefit Equalization Plan (BEP), and Supplemental Executive Retirement Plan (SERP)

  • This can translate into a nearly 15% increase over your normal benefit

• Must retire no later than September 30, 2017

  • This means up to 27 months of income received in 2017 which more than likely means higher tax brackets for those accepting the offer

• Access to reemployment assistance from Ford for six months

• Health insurance – type of coverage will depend on if you were hired before or after 6/1/2001

• Life insurance – eligible to maintain if you were hired on or after 1/1/2004, are age 55 or older with at least ten years of service, or are age 65 with at least five years of service upon termination

• Vacation

  • Regular – accrued through your last day on pay roll, unused accrued vacation is paid out if the last day on pay roll is prior to year-end

  • Purchased – unused days are forfeited

Buyouts from Ford or any of the “Big Three” are nothing new. As always, however, a thoughtful analysis should be completed when ultimately making a decision on whether to stay employed with Ford or to retire early. Many of the offers extended will be virtually the same, but everyone’s situation is different. If you’ve received an offer from Ford and would like our take on how that offer could impact your own long-term financial game plan, don’t hesitate to reach out to us for guidance. 

P.S. I did a webinar on this topic where I dug deep into the nuances of the offer and discussed some planning opportunities you might consider if you decide to retire early. Check out the replay below!

Nick Defenthaler, CFP® is a CERTIFIED FINANCIAL PLANNER™ at Center for Financial Planning, Inc.® Nick works closely with Center clients and is also the Director of The Center’s Financial Planning Department. He is also a frequent contributor to the firm’s blogs and educational webinars.

Dealing with the Loss of a Spouse

Contributed by: Sandra Adams, CFP®, CeFT™

Whether you have time to prepare for it or it is sudden, the loss of a spouse is one of life’s most traumatic events. For most, it means the loss of one’s soul mate and life partner, one with whom so many past memories and future goals and dreams are woven.  If you have recently lost a spouse or know someone who has, it is an understatement to say that there is an initial feeling of being overwhelmed – there is so much to do at a time when you feel the least capable (and the one with whom you’ve always shared the decision making duties in the past is no longer there to help you). There seem to be lots of people around but you are feeling numb, lost, and alone. 

To make things a little easier to handle at this time, you can break things down into things you really need to do now, things that need to be done soon, and things that can be done later. 

There are very few things that need to be done immediately/now (see my previous blog: Dealing with Death: A Financial Guide). We often encourage clients at this time to do only what is absolutely necessary and leave any bigger decisions for much later when you find yourself in a better place where you can think more clearly and confidently. This space we provide is called the Decision Free Zone – it gives you permission for yourself (and others) to not make any big decisions until you are comfortable moving forward in this time of transition.

Starting soon, it’s important to make sure you are taking care of yourself; eating well, trying to get enough rest, exercising, and trying to stay social. Support groups and counselors can be extremely helpful during this time. You will also need to meet with your professional advisors to make sure needed details and changes are taken care of on financial accounts, legal documents, etc. You will work with your financial planner to determine your income and budget needs for yourself going forward during this transition period, determine how cash will flow, etc. Decisions during this time can take months to years to refine and complete.

Later (and depending on the person this can be a few months or a few years since your spouse’s death), you will be able to look forward and visualize your new life and future. You will be able to work with your advisor to create a Bliss List that will include new goals and a plan for your “new normal.” You will determine: how you want to live your life going forward; what makes you feel joyful and fulfilled; and what is on your bucket list that is left undone? 

The devastation that you feel with a loss of a spouse seems insurmountable. With time, self-care, and the help of your financial planner who can hold your hand through the painful transition, for as long as it takes, you will be able to get through this! If you or someone you know has suffered the loss of a spouse and could use our guidance, please contact us at Sandy.Adams@centerfinplan.com.

Sandra Adams, CFP® , CeFT™ is a Partner and Financial Planner at Center for Financial Planning, Inc.® Sandy specializes in Elder Care Financial Planning and is a frequent speaker on related topics. In addition to her frequent contributions to Money Centered, she is regularly quoted in national media publications such as The Wall Street Journal, Research Magazine and Journal of Financial Planning.

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Opinions expressed are those of Sandra Adams and are not necessarily those of Raymond James. Raymond James Financial Services and its advisors do not provide advice on tax or legal issues, these matters should be discussed with the appropriate professional.