Shifting the focus from the short term to the long term.

How many short-term financial decisions do you make each week? You probably make more than a few. They may feel routine. They may demand your attention, day in and day out. Yet in managing these day-to-day issues, you may be drawn away from making the long-term money decisions that could prove vital to your financial well-being.
 
How many long-term financial decisions have you made for yourself? How steadily have you saved and planned for retirement? Have you looked into ideas that may help to lower your taxes or preserve more of the money you have accumulated?
 
As Nielsen notes, women are the financial decision-makers in their households – they not only make the lion’s share of the nation’s consumer purchasing choices, they also influence or handle many buying decisions on durable goods such as cars and houses. Fleishman-Hillard Inc. forecasts that women will control 2/3 of consumer wealth between now and 2023, and will be predisposed to inherit the bulk of the biggest generational transfer of wealth the U.S. has ever known in the coming decades. 1
 
While many women feel adept at making money decisions for today, some are less confident about making financial decisions for tomorrow. That anxiety may be unwarranted, however. University of California professor Terry Odean has spent more than 20 years breaking down stock market investing behavior by gender, and believes women are better investors. He has numbers to back this up: as the Washington Post noted, he studied male and female investors over seven years and found that women got 1.4% better overall returns than men did. Across the length of the study, the investment returns achieved by single women exceeded those of single men by 2.3%. Investment groups populated by women got a 4.6% better return versus investment groups made up of men. 2
 
Odean feels that men suffer from overconfidence in investing, while women invest more pragmatically, turning away from opportunistic day trading and taking more of a buy-and-hold approach. A bit controversial, this assertion? Perhaps. The statistics certainly get your attention. The bottom line is that women may be more adept at investing than they think. 2  Even if you feel you need more financial or stock market literacy, you may fundamentally have the temperament to be a good long-term investor.
 
Where do you stand financially? Start by taking an inventory of your investments and savings accounts: their balances, their purposes. Then, take an inventory of income sources: yours, and those of your spouse or family if applicable. Consider also your probable or possible income sources after you retire: Social Security and others.
 
This is a way to start seeing where you are financially in terms of your progress toward a financially stable retirement and your retirement income. It may also illuminate potential new directions for you:
 
*The need to save or invest more (especially since parenting or caregiving may interrupt your career and affect your earnings)
*The need for greater income (negotiate for a raise!) or additional income sources down the road
*Risks to income and savings (and the need to plan greater degrees of insulation from them)
 
Devoting even just an hour of attention to these matters may give you a clear look at your financial potential for tomorrow. Proceed from this step to the next: follow with another hour devoted to a chat with an experienced financial professional.

Tom Chancellor is a Certified Financial Planner Professional helping clients enhance their financial peace of mind. Tom spent 20 years as a marriage and family therapist and now incorporates resources from psychology, communications, and relationship studies in financial planning for people who experience life-changing events. Tom helps his clients and other financial professionals respond to life transitions such as divorce, death of a spouse, retirement, receipt of an inheritance and legal settlements. Contact Tom with questions at tom@teaktreecapital.com.
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Securities offered through Comprehensive Asset Management and Servicing, Inc. (“CAMAS”), 2001 Hwy 46, Ste. 506, Parsippany,  NJ 07054, 1-800-637-3211.  Member FINRA/SIPC. Teak Tree Capital Management, LLC,  is independent of CAMAS.
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This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note - investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.
    
Citations.
1 - nielsen.com/us/en/insights/news/2013/u-s--women-control-the-purse-strings.html [4/2/13]
2 - tinyurl.com/p4wqt8e [10/11/13]

Eldercare Financial Planning
This article is the first installment of a brief series on the topic of assisting people who may be at risk financially due to illness or complications of aging. Elderly people are more likely to rely on their life savings for security and comfort than younger people who are still working, so protecting their nest egg is crucial. Financial planners will tell you that many of their clients are baby boomers who have aging parents they are concerned about. These factors have led my firm to pay special attention to the challenges of aging. This series will illustrate some of the ways things can go wrong and offer some guidance to avoid or resolve problems.
 
A Common Problem
My first encounter with financial vulnerability of the elderly occurred before I made the career switch to financial services. In fact, it was influential in my decision. Looking back, you could say I went from being a clinical social worker to a financial social worker. The situation involved my mother in law who was becoming demented. I was recruited by the family to help manage her finances because she trusted me. As I began to sort through the confused notes, statements and correspondence scattered throughout her home it quickly became apparent that a steady stream of her money was flowing to a variety of unwise destinations.
 
She had duplicate subscriptions to magazines and was a sucker for memorial plates and other impulse purchases. Other concerns weren’t fraudulent but exploitative. She had purchased several unnecessary “no exam needed” final expenses life insurance policies. Then there were the marginal “charities” that had obviously identified her as an easy target which they could regularly and successfully solicit for contributions.
 
It was upsetting to think of my well-intentioned, gullible and diminished mother-in-law’s vulnerability. It was frightening to see how her financial security that had been built up over half a century could have been quickly eroded had I not been able to step in to help. Since then, I have learned that as our population ages, financial vulnerabilities that are prevalent among the elderly present a growing challenge that isn’t easily addressed.
 
Not Limited To Dementia
Harmful financial actions aren’t limited to people suffering from dementia. Loneliness, depression, physical illness and changes in brain functioning unrelated to dementia are among the factors that can lead an otherwise competent person to make emotionally driven choices that lead them astray. This is a problem for family members and professionals trying to help someone who may not want to be interfered with and is well within the legal range of mental competency.
 
What Can You Do?
In my family’s case, while my mother-in-law was still legally competent we were able to help her establish a trust with a bank and me as co-trustees. She also agreed to a durable power of attorney and named me as her agent. We were able to consolidate her investments and savings into the trust for more efficient management. Thanks to the power of attorney, I was able to cancel unneeded subscriptions and services, stopped automatic drafts to questionable charities and mysterious billers and even retrieved some money from the unnecessary insurance policies.
 
As her condition worsened, we soon would not have been able to help her so easily. First of all, she wouldn’t have been legally competent so a very unpleasant court procedure would have been required to grant conservatorship against her will. That is the second point. As her thinking processes deteriorated, she became fearful and distrustful and would clearly not have cooperated. It pays to have arrangements in place before they are needed.
 
All families should “have the talk” about what to do when we are not able to manage on our own. This isn’t only for those of us with elderly parents or relatives. We all are vulnerable to accidents or illness at any age. Having legal arrangements such as a durable power of attorney, healthcare directives and healthcare power of attorney can save a lot of heartache during an already stressful time.
 
Many families are reluctant to have these conversations. It isn’t fun to confront our own or our loved ones’ mortality. And there can be stresses in family relations that create anxiety or tension. But neither mortality nor relationship stresses are going to just go away. Family “issues” are likely to be worse in a time of great stress like when someone has had a stroke or dies than when everyone is as OK as they usually are. If you need help going forward, seek assistance from a family therapist, counselor or coach who is trained to help with a constructive conversation about difficult topics.
 

Tom Chancellor is a Certified Financial Planner Professional helping clients enhance their financial peace of mind. Tom spent 20 years as a marriage and family therapist and now incorporates resources from psychology, communications, and relationship studies in financial planning for people who experience life-changing events. Tom helps his clients and other financial professionals respond to life transitions such as divorce, death of a spouse, retirement, receipt of an inheritance and legal settlements. Contact Tom with questions at tom@teaktreecapital.com.
 
Securities offered through Comprehensive Asset Management and Servicing, Inc. (“CAMAS”), 2001 Hwy 46, Ste. 506, Parsippany,  NJ 07054, 1-800-637-3211.  Member FINRA/SIPC. Teak Tree Capital Management, LLC,  is independent of CAMAS.

The change has been gradual but notable & carries over to retirement planning.
 
More women have become the primary wage earners in their households. Generations ago, life and financial roles were cut and dried according to gender. Man: breadwinner. Woman: homemaker. Those stereotypes have, thankfully, shattered. According to the Bureau of Labor Statistics, 38% of women in heterosexual marriages now earn more than their husbands. Thirty years ago, less than one-quarter did. 1
  
The Great Recession of 2007-09 may have contributed to this shift. In June 2010, Department of Labor data showed that nearly 22% of American men aged 25-65 were unemployed. In addition, 16.6% of all Americans were in the “underemployed” population, either jobless or working less than 40 hours per week; it is reasonable to assume that men made up roughly half of that demographic. 2
 
So, in mid-2010, perhaps a quarter of American men aged 25-65 had no full-time job, and, in millions more American households, the woman of the house had become the primary wage earner.
 
As the economy improved, households with women breadwinners were in good shape. A 2013 Pew Research Center study of Census Bureau data found that, by 2011, the median total family income of such households was $80,000, compared to the national median of $57,100 for all families with children. Furthermore, the PRC analysis determined that 40% of households with children younger than age 18 were headed by women breadwinners in 2013, an all-time high. That compared to 10% in 1960. 3,4
 
Wives who earn more than husbands often control family money. Author Farnoosh Torabi (When She Makes More: 10 Rules for Breadwinning Women) conducted her own study on heterosexual households with women breadwinners in 2015, interviewing more than 1,000 women in the process. The key finding? When a woman is the top earner in a household, she is more likely to handle financial tasks and decision making. 4 
 
Women who made more than their husbands were 62% likely to pay the bills and 56% likely to initiate family or spousal conversations about money. Respectively, that compares to 43% and 43% when the woman makes less than the man. 4
 
Significantly, 44% of breadwinning women Torabi interviewed made investment decisions for their households (compared to just 27% when the man earned more). On top of that, 54% of breadwinning women took on the task of retirement planning for their households, as opposed to 31% when the male was the breadwinner. These findings are very encouraging, as so many financial professionals urge women to take an active role in saving and investing for retirement. 4
 
One study suggests more women are focusing on retirement planning. Financial Finesse, a provider of financial education for large employers, puts out an annual survey called The Gender Gap in Financial Literacy. The 2015 edition (released last fall) showed a 4.2% rise from 2012 in the percentage of women who said their retirement planning was on course. The percentage of women who had an asset allocation plan for their investment portfolios also rose 4.2% in that interval. 5
 
If you ask some financial professionals, they will tell you that they find women more open to financial education, with fewer entrenched beliefs and presumptions. Women are often quick to realize how much they don’t know, how much they can learn, and how much needs to be done. Coming to the realization that you need to do more for retirement is a good thing. Many pre-retiree households could do much more: according to a BlackRock survey, the average “leading edge” baby boomer (age 55-65) has $136,200 in a retirement savings account, which would produce retirement income of roughly $9,100 a year. 6
 
With retirement accounts and retirement dreams at stake, it isn’t surprising that high-earning women are taking the lead for millions of families – and asking for all the financial education they can get.   
    

Tom Chancellor is a Certified Financial Planner Professional helping clients enhance their financial peace of mind. Tom spent 20 years as a marriage and family therapist and now incorporates resources from psychology, communications, and relationship studies in financial planning for people who experience life-changing events. Tom helps his clients and other financial professionals respond to life transitions such as divorce, death of a spouse, retirement, receipt of an inheritance and legal settlements. Contact Tom with questions at tom@teaktreecapital.com.
 
Securities offered through Comprehensive Asset Management and Servicing, Inc. (“CAMAS”), 2001 Hwy 46, Ste. 506, Parsippany,  NJ 07054, 1-800-637-3211.  Member FINRA/SIPC. Teak Tree Capital Management, LLC,  is independent of CAMAS.
 
Citations.
1 - fivethirtyeight.com/datalab/how-many-women-earn-more-than-their-husbands/ [2/5/15]
2 -marketwatch.com/story/the-three-biggest-lies-about-the-us-economy-2010-06-29 [6/29/10]
3 - businessinsider.com/women-continue-rising-as-breadwinners-2013-5 [5/29/13]
4 - businessinsider.com/breadwinning-women-control-family-money-2015-3 [3/16/15]
5 - nextavenue.org/the-unexpected-news-about-women-men-and-retirement/ [9/16/15]
6 - seattletimes.com/business/workers-need-more-help-making-retirement-cushion/ [5/28/16]
 
This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note - investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.