Nauset Wealth Managment

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Category: Personal Finance

Planning for Assisted Living: The Promise, The Truth

Over the past several years my wife has managed her elderly parents’ care in an assisted living facility. Sadly, Geeta Anand’s New York Times article, How Not to Grow Old in America, is an accurate reflection of our experience of the care promised versus the care delivered, especially in the memory care unit. Paying for a full-time outside aide was the only way her folks got the help they needed. The take-aways from this article and our experience are:

  1. Do your research before the need arrives. The cost of assisted living can be more (maybe substantially more) than expected.

  2. Consider a wide range of options including moving to a different area, but still close to family. Assisted and retirement living facility costs vary widely around the country.

  3. Involve adult children if possible. This can be challenging but, in our experience, it can be critical for ensuring parents receive the care they need. Calling isn’t enough. They need to visit and have an open line of communication.

How Not to Grow Old in America

Two isn’t better than one, it’s critical.

As wealth advisors, when we work with couples it is a lot easier to have one point person on money issues. However, the other partner, no matter their age, needs to participate in discussions and decision-making. If they don’t, then two unfortunate consequences can occur:

  1. Couples that need to make changes to put them on a good financial path struggle to do so and watch their goals slip away;
     
  2. If the point partner dies, the surviving partner is left to learn and execute an estate and financial plan under duress and, once they understand it, they don’t like it.

Couples often think that the person who is most financially literate should manage their money — yet research shows why, especially as partners age, that’s a problem.

Read more about it in this New York Times article:

You’re the ‘Money Person’ in Your Relationship? That’s Problematic

Saving Your Identity…Or At Least Your Sanity

As a result of the Equifax breach several clients have called us for advice on how to protect their identity. Below is our view on the situation and some recommendations for how you can lower the risk that your identity is misused. We have also attached a short article that provides further recommendations.

  1. Assume your critical, personal information has already been obtained by someone through a data breach. It’s an unfortunate result of our interconnected world. Equifax is only one of many major data breaches over the past several years. Anthem, the state of Connecticut, several major retailers, even a company that provided recreational state licensing services to several western states are a few examples of other incidents.
  2. Taking precautions should reduce (but not eliminate) the risk of misuse of your information.
  3. Check your credit card statements and bank statements each month.
  4. Consider a credit monitoring service. Credit monitoring services vary but, generally speaking they will alert you to changes in your credit, suspicious use of your credit cards and other accounts. They may also coordinate the freezing of your credit. Here are a few credit monitoring services to consider. Nauset neither endorses any of these services nor do we receive compensation from any of them. You should do your own due diligence before working with any of them.
  5. Freeze your credit report. Freezing your credit restricts access to your credit report, however, also requires you to unlock your credit if you want to obtain a new loan, credit card, etc. For this to be effective you have to freeze your credit report at all three major credit bureaus. As noted above, a credit monitoring service may do this for you, which might make paying for the service worth it. If you want the added protection of freezing your credit on your own, here are the addresses for each of the three credit bureaus: Equifax, Experian and TransUnion. You can call or initiate the service online for each.
  6. Here is a brief article, written by Nick Clements and published in Forbes, about other steps you can take to prevent misuse of your information. 

Redefining Wealth

I have come to believe that most people view wealth as having more money than they currently have. However, I assume that at some asset level that definition changes. Amazingly, at least according to a Spectrum Group study, the number may be more than $25,000,000. How can this be? I remember in Paul Sullivan’s book, The Thin Green Line, his observation that the wealthiest person he ever knew was his grandfather, who was as a mailman. How is this possible? He lived comfortably, and apparently happily, within his means.

As I reflect on it, our clients who feel the wealthiest are not necessarily the ones with the most money. For them, wealth is about spending and enjoying the life their assets and income offer.

There are two actions we find that help clients become wealthier and neither involve having more money. First, look at money as the mirror of wealth, not the definition itself. Let your assets and your income tell you how to become wealthy by living within your means. Second, apply your life’s timeline to your definition of wealth. Do you want to act wealthy today by out-spending your means only to be poor in the future?  That’s short-term wealthy. Don’t you want to be long-term wealthy by living comfortably for your lifetime?

It’s not always so easy to figure out what lifestyle you can afford over the long term. It’s even harder to make decisions about what to keep or cut out of your lifestyle in order to be long-term wealthy. Having helped clients go through this process, I can tell you it’s worth it.

http://spectrem.com/Content/wealthy-define-wealthy.aspx