Ep 39: Making Smart Decisions During Major Life Events

Ep 39: Making Smart Decisions During Major Life Events

You need to make smart decisions during major life events, and we are here to help guide you. Whether it's a job change or divorce, we recommend taking three months to work everything out.

Most people like to think that they always make decisions based on logic and facts, but the truth is that emotions usually play a role for all of us in the decision-making process. We’ll explain how to handle big changes the right way.


Get ready to learn how to steer your retirement planning through the stormy seas of life events with yours truly and my insightful guest Sherry. We promise to equip you with practical strategies to confidently adapt your retirement plans amidst changes like job transitions, marriage, divorce and the joy of parenthood. Plus, we spice up our conversation with a lively comparison of regional Thanksgiving favorites.

As your nest begins to empty, you may find yourself faced with new financial considerations. Sherry and I shine light on this topic, discussing the golden opportunity to redirect your savings, the lurking risks of overspending, and the potential to boost your retirement fund. We don't stop there, as we also share valuable tips on creating a smooth transition for both you and your kids, and the importance of considering the long-term financial impact of your decisions. So, tune in and get tips, strategies, and a dose of holiday flavor in this enlightening episode!

Full Transcript

0:00:00 - Speaker 1

Discussions in this show should not be construed as specific recommendations or investment advice. Always consult with your investment professional before making important investment decisions. Securities offered through registered representatives of Cambridge Investment Research Inc. A broker-dealer member, finra, sipc Advisory Services through Cambridge Investment Research Advisors Inc. A registered investment advisor. Cambridge and Greenway Wealth Advisory are not affiliated. It's time to dive into some insider secrets of investing and retirement planning To make your retirement as smart and as elegant as possible. This is Money Chic with Sherry Rash.

0:00:31 - Speaker 2

Welcome into another edition of Money Chic, women and Retirement, with Sherry Rash and myself to talk smart decision making during major life events, and this is going to be our Thanksgiving-ish podcast, so we're dropping this right around the time of Thanksgiving, so hopefully everybody has a lovely holiday of her catching us afterwards. I hope you had a good holiday and we're going to talk about major life events and Thanksgiving is not one of them, although it is my favorite holiday. How about you, sherry? How you doing?

0:01:00 - Speaker 3

I'm good. How can you not love a holiday dedicated to eating and reflecting on what's great about your life? I mean it's awesome yeah.

0:01:10 - Speaker 2

And if you're a sportsman, you have football too. If you're a sportsman, you have some?

0:01:13 - Speaker 3

Yeah, that's it. I don't pay too much attention, I know, but for those folks that do.

0:01:17 - Speaker 2

It's a big part of it too.

0:01:18 - Speaker 3

That's right. Yes, I appreciate it. But, mark, do you like the turkey more or the sides? What do you get more excited for?

0:01:26 - Speaker 2

Oh see, that's just, that's rough, it's all good, it's all my favorite. I guess I want to go turkey because I'm a leftovers kind of guy too, and the turkey sandwiches over the weekend are fantastic.

0:01:38 - Speaker 3

How do you make your turkey sandwich?

0:01:40 - Speaker 2

Banays and cheese and lettuce and salt and pepper and sometimes lettuce and tomato.

0:01:50 - Speaker 3


0:01:51 - Speaker 2


0:01:52 - Speaker 3

I do that, but I put cranberry on there with salt makes it sweet and salty. You lost me. No, no cranberry.

0:01:58 - Speaker 2

I can't do it at all.

0:01:59 - Speaker 3


0:02:00 - Speaker 2

That's my least favorite item. I'm usually the running family joke every year too. They're like pass Mark the cranberry, they know better, Not my thing.

0:02:09 - Speaker 3

For the first year. Last year I made the cranberry sauce.

0:02:13 - Speaker 2

Did you?

0:02:14 - Speaker 3

So I think we had the can too, but I made the cranberry sauce and I liked it. I welcomed addition.

0:02:22 - Speaker 2

I think growing up on the jiggly jello can stuff. I think just really I don't know. I think it did something to me as a kid. Now I was just like no. So I have just not been a fan for a very long time. Is there a particular side that is your favorite other than cranberry? I guess?

0:02:41 - Speaker 3

I like them all because I like vegetables. So I mean all the vegetables, I like everything. It really depends on my mood and then what I. If I know I'm going to eat something the next day, I won't have as much at dinner of it.

0:02:55 - Speaker 2

So yeah, it's just a big plate, big smorgasbord of sides usually, and it's so funny because regionally, all over the country right, there's just different pockets of areas where people do different things. Right, that are just kind of you know you have your traditional items but every little kind of area has different accoutrements. If you will that go in. There In the South we do a couple of things. We do a wet and a dry stuffing and also collards right so collard greens and you know.

So that's some of the things that we really enjoy, and some people are like I've never heard of two kinds of stuffing. So some people are used to that, some people are.

0:03:27 - Speaker 3

Yeah, what's a wet stuffing.

0:03:28 - Speaker 2

So the wet, so the dry is outside, done outside the bird and the wet is done inside the bird.

0:03:33 - Speaker 3

OK, yeah, so, and that's cool yeah.

0:03:35 - Speaker 2

I mean, I'm not a chef, but that's my understanding.

0:03:38 - Speaker 3

Makes sense.

0:03:40 - Speaker 2

And there is a taste difference. So you know some people prefer either one. But yeah, we. My mom makes she's 81 now and she has to. She's like I'm making the collards and she makes her a pecan pie, so that's her thing.

0:03:52 - Speaker 3

She's like oh you, so I understood it to be pecan. No matter, it's pecan is the correct pronunciation. You're saying pecan.

0:04:01 - Speaker 2

I mean, I'm from the south but I still say pecan yes. I know, I get that one too. It's like, you know you're not southern boy, it's, it's pecan. I'm like oh, it's pecan. So you can say it however you want, right, as long as it's good.

That's right, that's right, well, good, well, anyway, hope everybody has a great Thanksgiving and enjoys all the festivities and all those good things. So, talking about reflection, sherry brought that up. So let's reflect or think about some things from major life standpoint. Unfortunately, sherry, a lot of these things on my list are going to happen to people as we age or different times of life, and so let's go through a few of these. Maybe not all, but there's a good chance that you're going to encounter some of these. So let's, let's talk about what to think about in the event that these happen.

And I'd like to view this I know you work with clients of all ages, but I think a good portion of people we might want to view this from, maybe, the standpoint of a little later in life, versus because there's going to be a difference. For example, with the first one a job change. It's going to affect you differently at 25 if you have a job change, and it clearly does if you're 55. Sure, yeah, so that's kind of the thought. So what's your, what's your thoughts on that one?

0:05:07 - Speaker 3

Well, I'll first preface this conversation by saying, whenever I'm working with my clients and they either have a major life event or they're making a change to their financial life, whether it's saving a particular amount or if they got a nice raise, whatever it is I say give everything three months, give three months to work itself out, continue living normally, but give it three months because that's how you'll see the future, the financial impact it's having on you. So with a job change, one is that, by choice or not by choice, right when you let go, did you receive a severance? Are you paid out for a certain period of time or did you choose to leave your job Meaning and, in both cases, your retirement plan? You need to make a decision with that. But it's not the retirement plan decision, it's not urgent, but it is a good idea to make a decision about that.

Many clients will come to me. I just had a client a few weeks ago who changed jobs and he said Well, I just, I'm just going to roll it over into my new employer's plan because that's what I've done for the past five jobs I've had. And it's like, okay, well, let's just, you don't have to do anything yet, but let's go through the pros and cons of that decision. So those that's kind of some of the things to think about. With a job change. One again choice or not by choice is a big thing.

0:06:35 - Speaker 2

That's a great point. And certainly healthcare. There's something, a lot of things to ponder, and if we're getting a little later in life, there's a lot to consider, you know, and making sure that we're not also derailing our retirement strategy as well. So some good points there. What about divorce? There's a good chance it's going to happen to more it happens, I think. What's the rate? Something over 50%, now, right, so it's pretty high, but it's definitely compounded, I would think, later in life. We've seen more and more gray divorces that's what they're calling them, I believe. When you're over 50, because you've got a lot, there's a lot of things to kind of go through.

0:07:07 - Speaker 3

I would say with my clients that are divorced, the biggest issue is it's now one income coming into a household and a lot of expenses are the same whether there's one person in the house or five people in the house. So it's expensive to live on your own and keep up with inflation and all of that stuff If you have children keeping their lives as young children living with you as normal as possible. So there's a lot to consider. Is there a settlement? How is money going to get split up? Are you keeping the home? Are you going to sell the home Again? How is that going to be split? So considering those types of factors during a very emotional time is important, but I think one getting a handle on money in versus money out as far as day to day living is a big one, because that could be a slippery slope if you're spending more than what's coming into the household as a single income.

0:08:07 - Speaker 2

Yeah, true, great point. And the taxable ramifications of various different accounts and things that the family may have accrued is going to be a factor as well. Sometimes we get into the emotional component and we're just, we kind of just want to get it over with or get things resolved and maybe we're not looking at all the angles of dividing assets that we need to be. So having a team, not just as a divorce attorney, is certainly going to be a critical time for that as well. Having a financial professional to talk with about those different kinds of angles is something to ponder also in that tumultuous time, let's go to maybe something a little sunnier. I suppose.

Unfortunately, you're probably losing. You have to lose someone to have this happen. But if you've been given an inheritance, if something you don't even maybe, especially if you didn't even realize it was coming right, because often people get an inheritance they weren't expecting it and they're not sure what to do. They're not really sure. Some people feel guilty. They feel like, hey, I want to be a good steward because this person left me this and I want to do some right things with it. Often, unfortunately, people kind of blow through it pretty quickly because it's kind of that found money? Hey, it's not mine. So what are some things to ponder? What are some things to ask yourself or question Should you find yourself in this boat?

0:09:21 - Speaker 3

I would say an inheritance or any type of windfall. If you get a big bonus that you might not have necessarily been expecting, that also can require some planning. The first thing I would say is when my clients come to me and they say my parent passed and I've inherited money, I say what kind of dollar is it? And most of the time we don't know that. So if it's retirement money, that needs to be treated a lot differently than after-tax money, for example. Retirement money, it needs to be depleted within 10 years.

Duty changes in the Secure Act. So whether it's a million dollars or $10,000, that account needs to be drawn down to zero within 10 years, where prior to it was over your lifetime. That's a big deal tax-wise. If you inherited both after-tax money and retirement money and you want to go on a vacation or make a big change to your home, does it make sense to completely cash out the retirement Because again, you're paying a lot of taxes on it? So, having a strategy around what you're going to do with the money and you know, do you really is it it's also emotional, right? This person left you money. Do you just want to stick in your check-in count and pay day-to-day bills with it? Or do you want to do something that you know they would have gotten a kick out of that you did right, so do you want?

to honor your late relative appropriately with a portion of the inheritance, but bonuses also or windfalls likely. You're going to be paying taxes on that as well, so don't be surprised when you have it. You could have a tax bill come tax time, so don't spend it all, because you may owe taxes come April of the following year.

0:11:12 - Speaker 2

Yeah, some great points indeed there, whether an inheritance or a bonus or big windfall. Yeah, absolutely Okay, let's go. Sherry, you're not here yet. You won't be here for any time soon, I don't think, but I'm already in this mode empty Nester mode, right? So this is a great opportunity.

0:11:29 - Speaker 3

Tell me what it's like, please. It's okay, can I be? Honest with you Poor kids it's not going to happen for a long, long time, since it's just me and you and nobody else, except for a bunch of a couple hundred listeners.

0:11:41 - Speaker 2

It's fantastic. So when my we've been empty Nesters for a number of years now I'm 51, my wife's 46, daughter went off to college and she went into the Navy and they've got this, you know, fantastic, we all have a really good relationship, only child. But you know, it's one of those things where she thought it was going to affect her worse than it did and it didn't. You know, she's like well, this is actually really great, but we love it when she comes to visit right, and so on and so forth. Matter of fact, she just made a joke saying that when she gets out of the Navy which is like another seven years she's going to just come and live upstairs for a while. We're like no, you're not.

0:12:18 - Speaker 3

My oldest daughter has said to me I am never moving out, I'm always going to live with you and I really think she's serious and probably is true.

0:12:27 - Speaker 2

Oh no, we're going to have a chat about that young lady. But take the, take the emotional fun out of it, or the component, whether it's good or bad. You know everybody struggles with it in different ways. I think most people would come back and agree and say that there's, it's a really great opportunity for you to. You know, sock away some money for things. You can really start to make a nice dent a good dent, I suppose, into retirement funding.

0:12:52 - Speaker 3

This is definitely where my three month rule can be beneficial. So give it three months. How different are your bills, right? The water bill, the electric bill, all of that food bill. How different is that? And let's quantify it right. Let's take an average how much you're saving monthly now that you don't have your children at home with you, and instead of spending it frivolously like you said, let's now. Let's give it a purpose. You're already used to living without that money, so let's just redirect it to something that can benefit you.

0:13:28 - Speaker 2

That's a great point, yeah.

0:13:30 - Speaker 3

Yeah, where you, you know, were you sacrificing saving for retirement or maxing out your 401K because you just were afraid of spending a little bit more than what came in. Well, now you have that leeway that you can, you know, contribute just a little bit more to your retirement. So, looking at what really, what the day to day expenses are and how you can just redirect it, but then also, you know, is the house now too big? Do you want to sell, relocate? That's part of the conversation. Again, I'd wait longer than three months before you make that decision, unless you don't want your kids to visit at all. And it's just a one bedroom apartment, but that's one way.

0:14:11 - Speaker 2

Yeah, you can't come back. We've got rid of the space. There you go.

0:14:13 - Speaker 3

That's right.

0:14:15 - Speaker 2

That's good. That's a great point though.

0:14:17 - Speaker 3

Yeah, so definitely there can be a lot of financial changes when, when you do become an empty nester.

0:14:23 - Speaker 2

Yeah, now I really. I really liked the way you put that too. They really struck me. Well, you're used to living without it, so I like hate it to someplace else. And I can hear, you know couples listen to the podcast right now, the different, different viewpoints. They're like, oh, but I really wanted to get myself something.

You know, and it's true, and that's kind of the risk a little bit early on, because it's it's almost kind of like that windfall you were just talking about a few minutes ago. It's kind of like, oh wow, holy moly, where'd all this extra money come from, right? Oh, because kids not there, especially if you're not funding their life as an adult outside of the house. And that's another avenue for folks to really be careful about, Sherry, because sometimes that happens. We've gotta be able to understand when it's time to cut those apron strings, if you will, because just because they're no longer living in the house and not necessarily eating you out of house and home, so to speak many couples and parents still contribute financially to their child's life as an adult outside of the home, and that's a slippery slope too for your own retirement. So just please be careful with that.

0:15:25 - Speaker 3

That could be a whole nother podcast episode, just talking about that. I was actually last week quoted in an article talking about something similar, how women's financial priorities are more focused on their family, first and foremost. But are you sacrificing your financial self? For the benefit of your family. So there has to be a happy medium.

0:15:49 - Speaker 2

Yeah, we should do that, we'll do a show around that and I get it right. And don't get me wrong, we all wanna sacrifice for our children. But you have to look at it from the right lens because, truly, if you do too much, you're not helping them not only in the short term, but also in the long term, because at the point when they're starting their family and now you're going into retirement and you don't have enough for retirement because you gave them too much, guess whose door you're knocking on right. So you're moving back in with the kids while they're at a tough time in their life because they're trying to start their own family in race, and so it's just, it's a very cyclical kind of cycle that you gotta be very careful of as well. So I think that's another good point. So we definitely should do a podcast around that. That'll be fun, that'd be interesting.

0:16:28 - Speaker 3

Yeah, absolutely.

0:16:30 - Speaker 2

All right. Final one. Unfortunately, this is what it is. None of us get out of here unscathed. We're all gonna pass at some point. So the death of a spouse, certainly a major life event. All of these things come with emotion that we talked about and we're trying to, for the most part, talk about these from a from a mathematic or money standpoint, not necessarily an emotional standpoint, but it's part of the equation. However, what are some of the financial you know ramifications to the loss of a spouse? On what we should be thinking about, sherry?

0:17:01 - Speaker 3

Well, I would say the most important thing prior to a death of a spouse is that both spouses know where the money is and who to contact. So you don't want to deal with the loss of a spouse and obviously the emotional torture that that is then also have no idea where money is or how you're gonna survive or how you're gonna live. So, being very prepared and involved in all of the money conversations where is your life insurance? Can I, you know, having both having copies of every account and logins and all of that stuff, so when that event happens, you're not dealing with the frustration of having to get your the financial house in order. I would also say making sure you have a trusted resource, your advisor, your accountant. That can also be that person that you lean on. We were talking in the last episode about, you know, hiring and firing advisors. Is the advisor you're with right now the person that you can lean on during a really hard period of your life?

0:18:07 - Speaker 2

Yeah, no for sure Having that. I think, first of all, it's a great point of having making sure that both parties know what you have, where you have it, and then, if you are working with a professional, that's a great resource for the other person to then turn to in that time when we are emotional, so that we're not making decisions and, unfortunately, a lot of these things, sherri, we covered today, they might have timelines attached to them, right? There's certain things that you may unfortunately have to do within a time period. Whether it's an inheritance, there's some rules sometimes or there's some deadlines on that job change when it comes to, you know, healthcare or whatever the case is, death of a spouse, so you gotta think about that too.

0:18:45 - Speaker 3

Yeah, but have a resource that can be there, right there with you, whether it's a sibling or a child that's experienced in some of these topics, or an advisor. So during major life events, we can also be emotional, so we wanna make sure we're making decisions with as clear of a head as possible.

0:19:05 - Speaker 2

Yeah yeah, and there's definitely a lot of ramifications to the death of a spouse. Clearly, the emotional would also on the other side as well. Taxes become an issue because there's just income level, income stream someone and so forth. All that gets changed and many things we just don't think about prior too. So having a plan, having a strategy, working with a professional, certainly comes in very, very handy for a number of reasons during any of these major life events. So we appreciate your time. We hope you picked up a couple of useful nuggets or two of information, as we said earlier. Hopefully you would also enjoy your holiday season, and Sherry and I will be back with more in December as well.

So make sure you're subscribed to the podcast if you're not already. You can find us on Apple, google, spotify, all the major platforms there you can simply type in money, chic, women and retirement into those apps of choice, or you can find all the information at greenwaywealthadvisorycom. At Sherry's website, greenwaywealthadvisorycom, there's a lot of good tools, tips, resources. You can schedule some time with Sherry, have a conversation. Whatever you might need to do, I'll find it all right there. So, sherry, thanks for hanging out. Have a great holiday and try not to have too much cranberry on your turkey. I'll try. I appreciate your time because I am not going to have cranberry on my turkey.

0:20:20 - Speaker 3

So you can have all of mine. How's that? I appreciate that, thank you.

0:20:23 - Speaker 2

I'll send it right over to you. So it will be good to go and we'll see you next time here on Money Chic women in retirement with Sherry Rash, financial advisor and money coach at Greenway Well Advisory.

0:20:38 - Speaker 1

Discussions in this show should not be construed as specific recommendations or investment advice. Always consult with your investment professional before making important investment decisions. These offer, through registered representatives of Cambridge Investment Research Inc. A broker dealer member, finra, sipc Advisory services. Through Cambridge Investment Research Advisors Inc. A registered investment advisor, greenway Well Advisory, are not affiliated.

Shari helped my husband and I consolidate our finances and create a system that works for us. She is a great listener and very authentic - we are thrilled to have this trusted advisor on our team.

Jessica, Charleston
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