Ep 51: Key Finance Decisions During Major Life Events (Part 2)

Ep 51: Key Finance Decisions During Major Life Events (Part 2)

We’re back to wrap up our discussion on financial decision-making during key life events. In part two, we’re covering the last 4 pivotal life moments that you might face, including caring for loved ones, unexpected medical complications, retirement, and the loss of a loved one. Shari will provide practical tips and guidance to help you make informed decisions and maintain financial stability throughout these times.


Get ready for a deep dive into the financial side of life's most pivotal moments with our esteemed guest, Financial Advisor Sherry Rache. Prepare to unravel the complexities of multi-generational living, tackle the shift from money accumulation to spending in retirement, and understand the vital role of both spouses in money matters. Sherry's expert advice could be just the knowledge you need to navigate these financial challenges.

Our discussion begins with the financial implications of multi-generational living, a common reality for many families. Can you imagine the burden of the increased utility bills and potential home modifications? Well, worry not, as Sherry will guide us on how to handle these additional expenses and their impact on your retirement strategy. We then venture into the realm of retirement preparation, understanding that the transition from earning to spending isn't as seamless as it may seem. Here, we'll dissect the importance of an income plan, understanding spending needs, and striking the right balance in investment risks for a worry-free retirement.

As we wrap up, our conversation takes a more personal tone, highlighting an often-overlooked aspect of financial planning - the crucial role of both spouses in financial decisions. With a heartbreaking story of a widow inundated with financial chaos after her husband's passing, we stress the pressing need for a well-informed financial strategy and the role of a trusted advisor in the process. Get ready to absorb all this and much more, as Sherry Rache helps us traverse the often overwhelming landscape of life's financial decisions.

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 to another edition of the podcast. It's Money Chic, women and Retirement, with Sherry Rash and myself. We're going to pick up the rest of our conversation. We started on the prior episode talking about key financial decisions to ponder during major life events like marriage, divorce, remarriage, things of that nature. So we went through a few of these and we've got a few more to pick up on this go around. So we're going to get into that conversation with Sherry and, of course, there's tons of things that happen to us in life. We want to make sure that we are looking at that not only from the emotional lens but from the financial lens as well, especially as we're moving through different stages of our life. And certainly that's where a qualified professional like Sherry can help when it comes to talking about your money and how to get through to and through this thing we call life. So Sherry's going to help us out, as usual. What's going on, sherry? How are you this week?

0:01:18 - Speaker 3
Doing all right, excited to talk about different phases of life and how an advisor can help you navigate it.

0:01:24 - Speaker 2
I think it's an important discussion that many people don't realize, for sure, I mean, and we're human, right, I mean you're an advisor, but you're also a mom and married and you're moving through these journeys just like I am. You know, I'm a radio and podcasting host and it's, you know, it doesn't matter what walk of life you're in, right, these things typically happen to just about all of us. Really, the list that we had, you know, some people will not experience some, but most of us will experience many of these and, like I said, we went through marriage, birth, divorce, remarriage, so now we're going to pick it up with. We kind of tried to put these in order a little bit, sherry, I think, of maybe how life comes at us and you know it moves around, but we just kind of tried to generalize this a little bit.

So let's get into parents, especially as we're aging in life. So maybe parents coming back in, you know, to the home, or whatever the case is, many of the Gen Xers I'm a Gen Xer we find ourselves in this sandwich generation of having adult age kids that need help and also senior parents that need help.

0:02:24 - Speaker 3
Yeah, yeah, I would say it's not only parents, it could be your children and potentially their families moving in with you. So having people in your home, that's not just you and your spouse or partner living under one roof.

0:02:37 - Speaker 2
So right and not just flash and tricksy the cool dogs right.

0:02:43 - Speaker 3
That's right. That's right. Blash just destroys everything, as we've learned a few weeks ago.

0:02:47 - Speaker 2
Well, you know what? So does my adult daughter when she comes home.

0:02:52 - Speaker 3
So, but luckily she doesn't stay for long, but anyway, she doesn't chew on shoes, though I'm willing to bet that, no, no no, but she has this weird tape fetish.

0:03:00 - Speaker 2
She's 25 years old and she's always taken like a sticker or a scotch tape and just kind of sticking it on her arm and walking around with her I'm like what is wrong with you? Why are you so weird?

0:03:08 - Speaker 3
It's like what did the Navy do to you, but anyway, Well, when we have additional family members moving in with us, we have to, you know, understand their quirks, right. But then there's also modifications you may need to make, whether it's a physical modification to your home, maybe creating an in-law suite or an apartment on your home to accommodate your child and their family. So a big financial expense could be actually modifying your home to fit everyone in it.

0:03:42 - Speaker 2
Yeah, for sure, and there's so many accommodations we got to, you know, make in that space as well. And then, of course, that's just the living space. What about the financial aspect of extra people in the house?

0:03:53 - Speaker 3
Right, right. So big financial impacts of having more people in the home, whether it's from the electric bill to the water bill, to the food bill, to everything, really gets a lot more stress. There could be more wear and tear on the home which may cause additional repairs. So it's just a big financial undertaking to have, you know, multiple families or multiple generations living under one roof.

0:04:21 - Speaker 2
Yeah, for sure. I mean, and if you do happen to have an elderly parent that's moving in with you my mom's 82 and she's doing great, but there could you know she's doing great right? So the downside if you want to kind of look at through the lens or I guess the glass half full is that while she's doing fantastic at 82, there could come a time in the next couple of years where she's not, and so if I have to bring her into the house, does you know? Then I got to look at in-home care services and it can get costly. So it can certainly dip into my retirement strategy as well. So those are things you got to talk to an advisor about.

0:04:53 - Speaker 3
Absolutely, absolutely. And then also, if there's multiple siblings and maybe the parent is not moving in with you but it may be you work out a deal agreement with your sibling of, hey, I'll help with the cost of having mom live with you. So there's a lot of creative ways in situations like this, but definitely working with an advisor to understand how this could affect your future retirement and additional expenses that you may not realize you're going to have.

0:05:28 - Speaker 2
Absolutely so. That's definitely another way that you know major life event can uproot our strategies and our plans and even our lifestyle, and doesn't mean we can't work through it, but it certainly helps to have, you know, a qualified professional helping you with all the financial aspects and some of the other aspects as well. Let's talk about the next one here, sherry, which is maybe going in and getting a. Unfortunately, a medical issue pops up or a disability, right? So I mean there could be any number of things that could. Obviously, when we went through the COVID issue, you know it could have been something there. It could have been just injured on the job or just injured in general. I mean you could just be out in your yard gardening one day and you know something happens. So how's that going to impact you, right?

0:06:07 - Speaker 3
Right. So what impact is this going to make on your day to day life? Are you still going to be able to perform your job functions as normal, so keep your employment? It's just uncomfortable or you're injured, or are you unable to work for a period of time or for sure, or long right, or does this medical issue or disability impact your longevity expectation, so kind of having that moment where you realize that this issue could unfortunately reduce the longevity of your life.

So you know, big, heavy conversation, a big thought. But then when that does happen usually when it takes something bad to have people act, to then create a contingency plan a will and a state plan, so it's really important. A power of attorney, health care directive, making all of these big decisions. So if you decline rapidly, this helps your family with your finances and your decision making process.

0:07:14 - Speaker 2
Yeah, I mean it's. There's so many little things in this that could certainly. You got to start asking yourself and I think that's a great point You've definitely got to update these documents right and ideally ahead of time, right. So it's important, as you're doing reviews and things, because there's just you never know what's going to happen Murphy's law and all that good kind of stuff. But having the proper documents in place can certainly help get these things moving in the right direction. When it comes to needing assistance or looking into government programs or whatever the case might be, a lot of times needing that power of attorney can go a long way. So, especially depending on the disability right, if you're not able to speak or something like that, you really need someone who can help you.

0:07:52 - Speaker 3

0:07:52 - Speaker 2
All right. So now we're down to kind of the final, if I kind of moving through this is hopefully most of us will not, you know, go through some of these, you know, like a disability or medical issue, but I mean, the odds are ever greater the longer we're living, right, I think it's what two out of every three people, or seven out of every 10, are experiencing some sort of a long term care event. That could fall into that category as well. But let's, let's go into retirement. They the actual, you know concept of retirement. You think, okay, well, if you're talking about major life events as our topic and we've got marriage and divorce and, you know, parents moving in with you, well, retirement's a major life event. Like many of us kind of look at it like I think we're so busy, Sherry, trying to, like you know, work and save money, and like we know it's coming. So let me say for retirement, yada, yada, but we maybe don't stop to actually think about the, the actual process of retirement. It's a major gear shift.

0:08:45 - Speaker 3
It is. I mean it's. It's a huge gear shift and I think we've done quite a few shows about how you have to think differently during retirement, what you have to do to keep yourself busy and just going. Day one of retirement what is that going to look like? And oftentimes I find that clients think about retirement as just the period of time, but they rarely think about okay, when is that day actually going to be? We do have to set a date, right. We just think, well, I'm going to retire and you just you think of it happening in the future.

But every day that you don't have that day put in place or day decided, that stake in the ground really pushes it back one more day. Because that's really one of the hardest questions is what day are you going to retire? What month, what year are you going to retire? We all know we want to, but it's often we're scared to declare it because then it becomes real. It's nice to like fantasize about retirement and think about what we're doing, but as soon as we make that declaration it becomes real. And it is scary for many because we're taught how to accumulate. We've been shown how to accumulate money through our 401ks, 403bs, IRAs. We're good at accumulating.

0:10:07 - Speaker 1
We get it.

0:10:08 - Speaker 2
It's easy to do, it's easier.

0:10:10 - Speaker 3
Yeah, yeah, salary. You know, just sending a portion of your pay and you don't have to think about it. De-cumulating your money is a whole nother strategy.

So, now you. So we've worked our whole lives to build up this wealth and now we're going to spend it, now we're going to use it, and that is really foreign to many people. We know that we're going to have to live off of our money somehow in retirement, but the act of actually doing it, that doesn't quite click. So, retirement you have to develop an income plan. Where is your money coming from? Obviously, we know social security, that's going to be a decent chunk of your retirement income. But developing an income plan and that income plan needs to have investments for both the short and the long term. A mistake that many people make is they say well, I'm retired, I need to be conservative now.

And they move. You know they stick the money under the mattress because they can't. We think we can't afford to lose it.

0:11:06 - Speaker 2
Well, that's what we've been taught too, so Right yeah.

0:11:09 - Speaker 3
But ideally we're living 20 plus years into retirement. That's a long time. We need our money to keep up with us, so having investments also for the long term is essential as well. So transitioning your portfolio from accumulation to decumulation is very important. And also, if you decumulate, you need to understand how much you're spending, which again is another hard question. When, how much income do you need in retirement? It's like I have no idea. So getting the date and the having an idea of an amount that you need are two of the big steps to get to that through that retirement phase.

0:11:53 - Speaker 2
Well, I mean, if you think about, I mean just life in general, right, is it's a tightrope, it's a challenge, right? We, you know, unless you're you know of the Uber lucky, and there's some folks that you know, we just we see them walk through life and we think, wow, you're so lucky, right, but you never realize, realize that everybody's got their different struggles, or whatever the case is. But whether it's, you know, deciding to have kids and then wondering, like, how will I raise them and will I be a good parent, or, you know, whatever it is, everything is about guessing and second guessing sometimes, right, and there's no manuals for a lot of this. You know that kind of stuff. And when you think about retirement, there's a lot of, certainly a lot more instruction for how to, how to save for retirement and how to, you know, convert this stuff into retirement funds and so on and so forth.

But it still is a bit of a tight rope and a little bit of a guessing as to what life's going to hold for you 10 or 15 years into the future, right, because you don't know to your point. So you still have to be sort of aggressive with future monies because you're going to need it as you're aging, but you also don't want to be too aggressive because you are, your time horizon is short. You're no longer going to be working to get the paycheck, so you can see where people struggle with that, and that's where you guys come into play. You know running scenarios and doing projections and analysis and really trying to break it down and trying to find the happy medium. That's also going to ebb and flow because it's not a set it and forget it.

0:13:07 - Speaker 3
You know, whatever that strategy is, it certainly is not a set it and forget it. You're absolutely right. And also to the point of too much risk, not enough risk. I'll also see many people to not use their money to live very, very modestly because they're so scared of running out of money, which that also is unfortunate. Right. You've worked so hard all these years. You want to enjoy yourself.

You don't want to have to be worrying about every penny that you're spending because you don't have the confidence in the plan that has that you created yourself or someone else created for you.

0:13:43 - Speaker 2
That's another tightrope, right, because you think, okay, well, I don't want to run out, so I don't want to spend too much. Then what happens to some folks that do that? They end up, you know, in their 80s with more money than they'll ever spend and now they don't have physically can enjoy it as much. Right, and maybe they sacrifice some of those early go-go years of retirement not doing the things that were on their bucket list because they were worried about running out. So again, it's all a tightrope and that's why you kind of have a strategy to help you navigate it. You know what's the? What is it the Lewis Carroll saying any road will get you there if you don't know where you're going, right, so get a road map.

0:14:19 - Speaker 3
I like the Yogi Berra, when you get to the fork in the road, take it, take it, right yeah.

0:14:23 - Speaker 2
Well, take what Something, take something right, Take it right.

Exactly, exactly. So the concept of retirement definitely is again a major life event that we want to certainly try to focus and hit head on as well. All right, so the last one. Obviously we had to save this one for last, because you know it's the one that most of us want to hide from, and but you know the mortality rates are what they are. No one you know is going to live forever at least at this point, so they haven't figured that out yet and so we're going to lose our own life as well as a loved one. And so, when it comes to dealing with the death of a spouse, look, there's a ton of emotional stuff in there, but from the financial standpoint, I would imagine that organization has got to be the key, the first key here, sherry, because if you don't have that in place, some things in place, while you're emotionally destroyed, it's just going to be that much harder to deal with.

0:15:17 - Speaker 3
Yeah, organization, open communication and having a resource. So if organization's only as good if the person that's organizing and shares it with their, with their spouse, right so? And if the person that passes away is the one who handled the finances, which worked with the advisor exactly and statistically right. Most men handle the finances of the household. As far as the big items go, women handle more of the day to day.

0:15:47 - Speaker 2
I was going to say I always thought that was funny because, like, growing up I remember my mom always handled everything and my dad did very little with it. But yet, statistically, you know, when it comes to the retirement side, it's just a funny little weird dynamic, I guess in life that you don't really realize until you age right. It's like oh, my mom's always got the purse strings growing up.

0:16:05 - Speaker 3
Yeah Well. Yeah, I mean, women handle like the day to day spending so they know what's going on going in and out of the household. But like the bigger stuff, the retirement, all that, generally speaking, men would handle that so and that's usually what happens.

0:16:22 - Speaker 2
And we pass away first right. And then yeah, and then statistically men pass away first I get, statistically, that's true, not everybody, but yeah.

0:16:30 - Speaker 3
Yeah, when you know. Then where is this money? Like I knew something was coming in, because I'm paying the bills and I'm handling the day to day.

0:16:38 - Speaker 2

0:16:38 - Speaker 3
But I don't know where it's coming from. I don't know who I call to get my questions answered. So even if those are the roles of the household, that's fine. You just need to know where everything is and, most importantly, who to call when something happens.

0:16:56 - Speaker 2
That's a great point. I don't know if I shared this on the last episode or not shared. Did I share about the lady we bought this house from, my wife and I Did I share that?

0:17:03 - Speaker 1
story with you.

0:17:05 - Speaker 2
So to that point of who to call and needing help, right To this point of the conversation, she we bought this house from the lady about seven years ago. Her husband had passed away about three years prior to us buying it. It took her three years to get everything cleaned up after his passing Literally the home as well, but also financially and figuratively and a lot of ways, because they didn't have a strategy or plan a place and she was in her early seventies and she shared with us and because we was one of the situations where we didn't just like meet at the signing table and never spoke again. Right, we talked to her a few times actually prior to, and then she gave us a guided walkthrough and showed us where she kept the manuals for everything she had installed.

And she was very nice lady, very thorough, and basically she wound up telling me, after I told her, what I did for a living and how I talked with a lot of financial professionals and yada yada, and she told me that the biggest regret she had in that part of her life major life event that we're talking about here was that she never had the time to grieve for her husband because she was too busy handling everything when he died Because she didn't know where everything was at and it was just a hot mess right. They just had stuff everywhere financially and, you know, all over the property. So she spent three years getting her life back in order after the passing of her husband and never got the chance to really mourn him. She said that was a really, I guess, unintended consequence to what you know, to their choices, and something that she regrets. I thought that was pretty powerful.

0:18:29 - Speaker 3
I got goosebumps because it's so true and I would say that happens. That's more the case than not right Right.

And when, if you were, as a husband and wife, working with a financial advisor, most of the time after the death of the male, the 75% I think it is of the women of the widow finds a new advisor to work with, and usually it's because that advisor did not include her in the conversations. So it's so valuable to have a relationship with an advisor or find an advisor that you both like and you both can work with and they didn't have one at all, so like she didn't even have one to turn to.

0:19:13 - Speaker 2
But even if the husband had been working with one and then let's say it was for you in this situation the wife could call you up and say, sherry, I need help, right? And even if she didn't feel like I don't have a relationship with Sherry because you know they were the ones doing all the communicating, at least at bare minimum it was still a resource for the spouse to reach out to.

But, to your point, both people should be involved. Even if money's not your bag and it's not your thing and you know it frustrates you or whatever, have that cursory knowledge of what you have, why you have it and who you're working with so that, in this event, you do feel you have a rapport right.

0:19:48 - Speaker 3
Absolutely. I mean I hear it all the time when I'm out at events or just at soccer practices or at meeting with other moms. I hear it all the time my husband handles the finances and he has a spreadsheet.

0:20:03 - Speaker 1
And it's like great.

0:20:04 - Speaker 3
Do you have access to that spreadsheet? Is this a Google Sheet? Are you included in it? Would you be able to find the spreadsheet very quickly? And what's on this spreadsheet? Does it have you know the number, the account numbers, the contact info, where, what is on this? And you don't have to enter numbers in on the Excel spreadsheet. But you need to know where it is, and so you at least need to know where to start from. And you're not waiting for and now statements don't even come in the mail, right? So at least before you would get statements in the mail and go okay, I need to handle this. Now everything's electronically. So sifting through emails trying to find it, it's a nightmare. So keeping everything as organized and then communicating it, sharing passwords also maybe with a adult child. So there's a great program called LastPass where you load your user names and passwords into it and then you can hook another email address up to it and say you now have access to this account via your mother.

0:21:12 - Speaker 2
Gotcha, gotcha.

0:21:12 - Speaker 3
You don't see the password, you don't. You don't see that, you just get the way to log in. So that's also another good way to communicate where your stuff is where your accounts are Because, like I said, statements don't come in the mail anymore, so it's just an electronic treasure hunt.

0:21:33 - Speaker 2
Yeah, and for those who get a little leery of more apps or more online things or whatever, I had another person give me an interesting idea. They said they created just a regular old spreadsheet, right, with all the logins and passwords, and then, instead of just having it on just a computer or whatever like on Microsoft Word, they just downloaded it onto a little USB, you know a little thumb drive, right and then it's taped, the thumb drive, with all the pertinent information, not just their passwords, but it's taped to the inside of their safe With a. You know it's got a little note and it's taped on the sidewall and it was like in case of emergency, I thought well, that's kind of.

It's kind of a little extra fun little thing, but it's kind of clever, right, and it gives you, for that off, I guess, more of that off grid sort of sort of feel, right. Well, I don't want to have all my stuff online or whatever. The case is, some people go through that, you know. It's just another way. But, yeah, having a safe is not a bad idea, right. Having some documents and some things in a safe is certainly not a bad idea. Or safety deposit box, right. So some place where the loved one who's left behind can get access to the information.

Because there's so much to deal with and go through and just also just the hassle that becomes. You can't do anything without the death certificate. I was doing another show with someone whose husband had passed away and the car was in his name. She couldn't even retitle the car, you know, because they were having to jump through all these hoops. So you just never know when that stuff's going to come in. And it's always important to have the right documents in place and, to your point, having a professional that can really help you walk through it certainly takes off a lot of the burden and helps you make some of those decisions that are going to be emotionally tough to make anyway allows you to grieve appropriately.

Yeah yeah, I thought that story was really appropriate. So thanks for hanging out, thanks for sharing and talking with us here and listening to the podcast. Folks, we always appreciate it. If you've got some questions, hit sharey up. Reach out to her.

Major life events are gonna happen to all of us in different ways and it's important to have people we can turn to for help in these situations, especially if it's not something that we're usually or comfortable with or we've got much experience at. So reach out to a qualified professional Like Sherry Rache. She's a financial advisor and money coach at Greenway Wealth Advisory. You can subscribe to the podcast Money Chic, women and Retirement on Apple or Google or Spotify. You can simply just type that into the search box or just stop by her website, greenwaywealthadvisorycom. Lot of good tools, tips and resources. You can schedule some time with Sherry as well at greenwaywealthadvisorycom and, of course, subscribe to the podcast. Sherry, we went a little bit long this week, but I appreciate it because great conversation. Thanks as always. Thank you, we'll catch you next time right here on the podcast Money Chic, women and Retirement with Sherry Rache.

0:24:20 - Speaker 1
We'll catch you next time.

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
Subscribe to newsletter
Subscribe to receive the latest blog posts to your inbox every week.