Artwork for podcast Enjoy More 30s: Family Finance
Your Parent's Money Mindset Series Recap | Series 3.8
Episode 85th July 2021 • Enjoy More 30s: Family Finance • Joseph P. Okaly
00:00:00 00:13:17

Share Episode

Shownotes

A recap of all 7 episodes from this Your Parent's Money Mindset series to help you take positive action

Securities offered through TFS Securities, Inc., Advisory Services through TFS Advisory Services, a SEC Registered Investment Advisor Member FINRA / SIPC. TFS Securities, Inc. located at 437 Newman Springs Road, Lincroft, NJ 07738 (732) 758-9300.

Transcripts

Voiceover Audio:

Welcome to the EnjoyMore30s Family Finance

Voiceover Audio:

podcast. The only podcast dedicated to making life more

Voiceover Audio:

enjoyable for young families by hitting on the financial topics

Voiceover Audio:

that tend to weigh on us stress us out and distract our focus

Voiceover Audio:

from simply enjoying life.

Joseph Okaly:

Hello, and welcome to the series three, Your

Joseph Okaly:

Parent's Money Mindset series recap. We really covered a lot

Joseph Okaly:

so far this season. We talked about bridging that initial

Joseph Okaly:

financial conversation gap, better understanding your

Joseph Okaly:

parent's existing mindset, how titling and account types will

Joseph Okaly:

affect what you receive, to really the major medical

Joseph Okaly:

expenses and exposures. That's a lot. It's valuable, actionable

Joseph Okaly:

information but as I always say, at the same time, we don't want

Joseph Okaly:

to be overwhelmed by it, right? If we take positive action on

Joseph Okaly:

one of these seven relevant episode topics, you and your

Joseph Okaly:

parents this time around, are better than you were before. And

Joseph Okaly:

you should really be proud of that. You're improving not only

Joseph Okaly:

your life, but your parent's life too. The people that have

Joseph Okaly:

really looked out for you since you were born. We also want to

Joseph Okaly:

make sure we're remembering the goal, remove anxiety and

Joseph Okaly:

financial worries so we can focus our energy on what matters

Joseph Okaly:

most, enjoying more living with family and our friends of

Joseph Okaly:

course. Whether it's our own financial anxiety or that

Joseph Okaly:

anxiety derived from our parents well being the same end result

Joseph Okaly:

is reached. So the kind of worry that goes away when you know

Joseph Okaly:

your parents aren't going to run out of money. Knowing your

Joseph Okaly:

parents are covered medically and not going to come live with

Joseph Okaly:

you kind of worries you might have. Know where you're going to

Joseph Okaly:

have to go to or talk to when your parents pass away kind of

Joseph Okaly:

worry. Know how to handle some of what you may receive when it

Joseph Okaly:

happens, worry. So be proud of all these steps as you take

Joseph Okaly:

them. You're making life more enjoyable than for you and as

Joseph Okaly:

that natural consequence based on this series, for your loved

Joseph Okaly:

ones as well. Lastly, stay tuned to the end as we're going to be

Joseph Okaly:

announcing our focus for the next series to come, which is

Joseph Okaly:

always very exciting.

Joseph Okaly:

So without further ado, get together with your spouse and

Joseph Okaly:

let's review. Number one, how to talk with parents about money.

Joseph Okaly:

So the main point from this initial episode here is to

Joseph Okaly:

acknowledge that money is hard to talk about. But there are

Joseph Okaly:

very significant reasons why you should think about having those

Joseph Okaly:

conversations with parents. The first is to head off any bad

Joseph Okaly:

track earlier than later. No surprise they have to come live

Joseph Okaly:

with you. And secondly is the reverse of that, where if

Joseph Okaly:

they're in a good position to get them thinking about making

Joseph Okaly:

the most out of their money that they've worked so hard to earn

Joseph Okaly:

over their lifetimes. Either way, know that they are almost

Joseph Okaly:

certainly coming from a very different money mindset. So

Joseph Okaly:

remember, very likely no public Venmo purchases with emojis.

Joseph Okaly:

Lastly, start bridging that gap by asking very basic financial

Joseph Okaly:

preference questions. So how many banks do you use? Do you

Joseph Okaly:

like credit cards or cash? When did you start talk, talking to

Joseph Okaly:

somebody about investments, things like that. So those that

Joseph Okaly:

are kind of expressing maybe concern without being invasive?

Joseph Okaly:

Again, the goal is to start a conversation, not tell them why

Joseph Okaly:

they're wrong.

Joseph Okaly:

Number two, your parents trust their advisor. The main point

Joseph Okaly:

here from this episode is if you were able to form that

Joseph Okaly:

conversation around money with parents, don't underestimate the

Joseph Okaly:

trust they likely have in whoever they're already working

Joseph Okaly:

with. Your parents are older, they've likely been working with

Joseph Okaly:

them for a very long time. Secondly, while you may be used

Joseph Okaly:

to asking why-based questions, your parents may not be. They

Joseph Okaly:

didn't grow up with the internet to fact check or self research

Joseph Okaly:

everything. If the professional said it was this way, then many

Joseph Okaly:

times you just kind of went with it. You didn't have any other

Joseph Okaly:

options, you can go research it on your own very easily. Lastly,

Joseph Okaly:

if you are able to ask some more thought provoking questions. So

Joseph Okaly:

for example, what life expectancy assumption did your

Joseph Okaly:

advisor make? How does your annuity actually work? And who

Joseph Okaly:

does it go to if something were to happen to you? What assets

Joseph Okaly:

transferred directly as opposed through the will and again, this

Joseph Okaly:

is the one that most people just always kind of assume it's all

Joseph Okaly:

going to pass through the will, but a lot of assets especially

Joseph Okaly:

annuity retirement assets, do not. Be respectful again. The

Joseph Okaly:

goal is to have them think and evaluate and ask your opinion as

Joseph Okaly:

needed. The quickest way to get shut out is to preach to them.

Joseph Okaly:

Episode Three, What About Mom? Surviving Spouse = CFO. This

Joseph Okaly:

deals with the fact that one of your parents is going to outlive

Joseph Okaly:

the other one. And the one that is going to be the longest

Joseph Okaly:

living may not be the one who currently handles the finances.

Joseph Okaly:

If that is the case, you are going to have to provide

Joseph Okaly:

significant assistance. Having both parents fluent to some

Joseph Okaly:

degree in what is going on financially ahead of time really

Joseph Okaly:

is the smartest approach. I shared how with my own

Joseph Okaly:

grandparents, my grandfather passed first, but because his

Joseph Okaly:

illnesses kind of stacked up a little bit, as time went on, he

Joseph Okaly:

had the opportunity to teach my grandma enough about the

Joseph Okaly:

finances so that now today she's able to manage. If you find

Joseph Okaly:

yourself needing to assist, start with organizing with what

Joseph Okaly:

they have. Generally the best place and starting is with the

Joseph Okaly:

bank accounts. Lastly, help in adding extra awareness in

Joseph Okaly:

certain areas for that surviving spouse, such as you know, Social

Joseph Okaly:

Security, where they're only going to maintain the higher of

Joseph Okaly:

the two. Life insurance where maybe, you know, they don't know

Joseph Okaly:

where the documents are, they already paid it off. So you

Joseph Okaly:

don't want to miss that obviously. Annuities which have

Joseph Okaly:

so many moving parts, many times. IRAs, which is an all

Joseph Okaly:

likelihood not be immediately liquidated to help ensure no

Joseph Okaly:

unfixable mistakes are made when it comes to taxation. And then

Joseph Okaly:

the last part of that, which we also mentioned, was talking

Joseph Okaly:

about making sure to have that appropriate power of attorney

Joseph Okaly:

(POA) in order. Because now with one spouse, if something were to

Joseph Okaly:

happen to them, you need somebody that can speak on their

Joseph Okaly:

behalf if you need to you your sibling, somebody.

Episode number four:

Inheriting Assets, Opportunities and

Episode number four:

Headaches. Here we touched on how there can be a lot of

Episode number four:

headaches that come up, whether through incorrect beneficiaries

Episode number four:

being listed, incompetent executors, or just scattered and

Episode number four:

disorganized paperwork. These can significantly delay the

Episode number four:

settling of the estate cause issues in taxation, or really

Episode number four:

worst of all, it could mean that money goes to people they didn't

Episode number four:

want it to go to. The best course of action by far is to be

Episode number four:

proactively asking some questions again, to your parents

Episode number four:

ahead of time. These are not you know, how much do you have mom

Episode number four:

and dad? How much you guys worth kind of questions, just

Episode number four:

questions to make sure that they have their ducks in a row. Does

Episode number four:

everything go through your Will you have retirement accounts?

Episode number four:

They probably don't go through your will. Are you sure who the

Episode number four:

beneficiaries are? Do you know where any important information

Episode number four:

is? Should I know where any important information is now, or

Episode number four:

at least who to go to in order to find it if I need it? So

Episode number four:

questions kind of like that.

Next episode:

Step Up! The Gain Is Gone. Here we covered the

Next episode:

current rules again, as of the spring of 2021. Were

Next episode:

non-retirement account gains are essentially wiped away from the

Next episode:

individual inheriting again, the non-retirement assets. The

Next episode:

second thing to make your parents aware of though, is some

Next episode:

of those general questions we touched on. Because quite

Next episode:

frankly, we find very few people have these things kind of

Next episode:

explained to them. So again, the broad workings of this step up

Next episode:

rule, you have a stock, I bought it, it's worth $50 a share, it

Next episode:

goes up to $120 a share, I pass away. The person that is

Next episode:

inheriting that account, all that gain is wiped away here.

Number six:

Inherited IRAs, More Limited Options. So while the

Number six:

last episode Step Up! The Gain Is Gone, could possibly be

Number six:

changing with the current administration over here,

Number six:

inherited IRAs already were changed back in 2019, with the

Number six:

Secure Act. So this episode, we focused on how these inherited

Number six:

IRAs now have new unique rules, where instead of being able to

Number six:

have a lifetime distribution window, it's been shrunk all the

Number six:

way down to 10 years. All the money in an inherited IRA has to

Number six:

be distributed within 10 years. However, your parents do still

Number six:

have some powerful options at least, in potentially minimizing

Number six:

that tax and they can do that through what's called a Roth

Number six:

conversion. So ask your parents, did you hear about how they

Number six:

significantly changed the rules for people inheriting IRAs? Do

Number six:

you know if your plan is set up to properly try and help

Number six:

minimize or reduce these total taxes paid long term so that

Number six:

Roth conversion can be powerful because you can take those

Number six:

assets, and you can move them into a place that could be

Number six:

growing tax free, instead of leaving them currently where

Number six:

they may be in a place that they're going to continue to

Number six:

accumulate tax deferred, meaning that it's going to be a large

Number six:

growing tax burden that you may likely have to be, you know,

Number six:

paying at the top of your working career.

Number six:

And finally, number seven, Retiree Healthcare for Parents,

Number six:

A Lot Isn't Covered. This was a really, really important one.

Number six:

The takeaways here are to realize your parents may not be

Number six:

fully aware of what coverage they have medically in

Number six:

retirement, and could possibly be assuming they are more fully

Number six:

covered than they actually are. So talk to them about what they

Number six:

may have. Say that there are certain things that are only

Number six:

partially covered by Medicare, and others that are flat out not

Number six:

covered at all, like essentially all long term care expenses.

Number six:

Remember there is that guaranteed issue or acceptance

Number six:

period right after losing existing medical coverage for

Number six:

obtaining that Medigap supplement. So again, Medicare

Number six:

only covers roughly the first 80%. That extra 20% you do need

Number six:

to fill either with a Medigap supplement or with a Medicare

Number six:

Advantage plan. And even a rough plan of what would happen in a

Number six:

long term care situation is highly, highly recommended. What

Number six:

do you guys going to do? Do you need to use your home equity?You

Number six:

have an account that you're not touching? Did you just happen

Number six:

enough to be lucky to have purchased a long term care

Number six:

insurance policy back in the day before the prices went up so

Number six:

much? What is our plan if God forbid something happens?

Number six:

And so there you go, the first series I have ever heard about

Number six:

trying to help you speak with your parents about money is

Number six:

complete. So take some time to review these important areas.

Number six:

And remember, again, if you can make one positive change just

Number six:

one, then you are one step farther along and having life be

Number six:

more enjoyable for you and this time your parents as well.

Number six:

If you can absorb and implement all of the items that's

Number six:

fantastic. That's great. You have an ability to now really

Number six:

take big leaps ahead for where most where most people

Number six:

unfortunately tend to be. So I'm happy to be able to provide this

Number six:

to you. If it is overwhelming, if you have questions, just want

Number six:

someone to help you get all this stuff in order so you know

Number six:

exactly where you are and what path you're going on, head over

Number six:

to our website at www.enjoymorethirties.com.

Number six:

That's enjoy more three zero s.com and click Ask Joe to

Number six:

connect. I'd always be happy to help.

Number six:

Overall as always, thanks for tuning in. If you enjoyed this

Number six:

episode, like I always say please make sure to click,

Number six:

follow, and review us on Apple podcasts or wherever you listen.

Number six:

There are literally millions of young families out there I'm

Number six:

trying to reach and help just like you.

Number six:

Now to finish off today, I still need to share our next series as

Number six:

promised, which is entitled The Main Money Misnomers. Have you

Number six:

ever wondered as an advisor, what are the main

Number six:

misunderstandings when it comes to money that I get most

Number six:

regularly? I'm going to share some of those most prevalent

Number six:

misnomers I come across, especially when it comes to

Number six:

young families. We are going to cover tax refunds, goal setting,

Number six:

crypto, what's actually worse than death, and even Hershey

Number six:

bars. So it's a really wonderfully unique, colorful lot

Number six:

of topics that you may have thought about before and with a

Number six:

little information can likely worry about less than the

Number six:

future. As always trying to help in achieving that goal that we

Number six:

always have here of making life more enjoyable. So thanks for

Number six:

joining me today and I can't wait to connect with you again

Number six:

soon in the series to come.

Voiceover Audio:

The conversations on this show are

Voiceover Audio:

Joe's opinions and provided for general information purposes

Voiceover Audio:

only. They do not constitute accounting, legal, tax or othe

Voiceover Audio:

professional advice for you specific situation. You shoul

Voiceover Audio:

always seek appropriate advic from a financial advisor

Voiceover Audio:

accountant, lawyer or othe professional before acting upo

Voiceover Audio:

any content or information foun here first. Joe is affiliate

Voiceover Audio:

with New Horizons Wealt Management LLC, a branch offic

Voiceover Audio:

of TFS Securities, Inc., and TF Advisory Services an SE

Voiceover Audio:

registered investment adviso member FINRA/SIPC

Links

Chapters

Video

More from YouTube