Tag: financial future

Long-Term Planning for Women in a Post-COVID-19 World

Published in: Resources |

If COVID-19 has taught us anything, it’s that we never know what’s in store for us. You could discover your new favorite flavor of ice cream this week. You could meet your future best friend next month. Or you could go to bed tonight living a normal life, and wake up tomorrow to find yourself in a global pandemic.

The COVID-19 pandemic thrust the world into a state of panic and uncertainty. Trips were canceled, plans were put on hold, and suddenly many of us began to question our life’s trajectory. However, over a year later, as restaurants show signs of life, people start to visit with friends again, and vaccines are (slowly) rolled out, it’s an important time to consider your long-term plan.

Although 2020 showed us that even the best laid plans are subject to unpredictable exterior circumstances, we should still be as prepared as possible, especially when it comes to finances. Due to women’s typically longer life-spans coupled with systemic and societal issues like the gender pay gap and career interruptions, long-term financial and estate planning is especially important for women.

How to map out your long-term financial plan

When it comes to thinking through your personal plan, here are a few steps you can take:

  1. Think about your dreams, goals, and aspirations. Start by thinking about your life 5-10 years from now and go from there. What does your life look like? Are you retired? Are you starting a new business? Are you raising a family?
  2. Now, think about each of those dreams, goals, and aspirations with a dollar amount attached to them. Are you living off of a pension or a retirement savings account? Are you taking out a loan to get that new business up and running? Do you have a child to care for, or even two or three? At the end of the day, you want your money to work for you and align with your ambitions. It may not be romantic to lay out your dreams with price-tags attached to them, but momentarily taking off those rose-colored glasses to look at your goals through a pragmatic lens could be the difference between making those dreams a reality and just fantasizing about them.
  3. Once you’ve sufficiently thought things through, it’s time to make a solid plan and put that plan in action. From saving money to investing, each person’s plan will look different. Working with a financial advisor to create an individualized plan tailored to your specific needs is a great place to start.
  4. Now that you’ve thought about your personal plan, go the extra mile and think beyond it. If you were to pass away or become incapacitated tomorrow, how would you want your assets distributed, and who would you want to handle your responsibilities? It may feel like an unpleasant topic and one that you’d rather put off, but one of the best things you can do for your future generations is put a sound plan in place, and when it comes to your estate, the sooner you start planning, the better.

At The Humphreys Group, we know that it can be difficult to put a short-term plan in place, much less a long-term plan. We’re here to help. Over 30-plus years, we’ve seen that it takes care and clarity to build the trust needed to personalize your financial plan. We take the time to learn about you, your dreams, and aspirations to develop a financial plan that will evolve with you during your life. If you’re interested in getting a second opinion on your long-term financial plan, reach out to our team today.

Overcoming Financial Imposter Syndrome

Published in: Resources |

You’ve probably heard of imposter syndrome — the psychological phenomenon in which an individual doubts their talents and qualifications, believe they only succeeded due to luck, and fear that they will be exposed as a “fraud.”

But do you know what financial imposter syndrome is? It’s when you finally start making a living wage, but you still feel poor and old habits remain. “If you’ve spent most of your career not earning much, then it’s more familiar to you than being financially stable,” New York Times writer Eric Ravenscraft writes. “Making enough money doesn’t feel real yet, and you’re afraid it will all go away.”

This anxiety can prevent you from taking care of yourself even though you can afford to — you put off expensive dental work, avoid getting your car fixed, or buy cheaper but not as healthy food.

It’s smart to keep living within your means; you don’t want to fall into the trap of “lifestyle inflation,” where you spend more money because you earn more money. But financial imposter syndrome can greatly affect your mental health, and it’s a problem you shouldn’t ignore.

Here are some tips on how to get over financial imposter syndrome.

1. Give yourself permission to spend money.

When you’ve struggled with paying your bills for so long, it can be hard to justify buying something you simply want and that would “only” bring you joy and improve your life. As New York Times writer Eric Ravenscraft writes, “If you manage to get a better paying job and improve your financial situation, no one automatically comes along to teach you what you can do with your new paycheck.” Try to make a conscious effort to break out of old thinking patterns; allow yourself to spend money on things from time to time that bring you joy.

2. Talk about it.

Voicing out loud what you’re going through — with a therapist, a financial advisor, a friend, or mentor — can help you see the financial facts of the situation versus your perception. The Humphreys Group regularly hosts Conversation Circles where we talk about the emotional aspect of money; consider coming to one of our events!

3. Create a script for times when you feel financial imposter syndrome creeping in.

When you feel old insecurities and unfounded worries coming in (e.g. “I can’t buy that — that’s something that ‘other people’ do,” “I’m selfish for spending money on better clothes/food/etc.,” or “It’s just luck that I got this job; I don’t deserve this money.”), have a mantra/script to remind yourself that you deserve financial success and that you worked hard to get where you are now.

Managing the Emotional Side of Money

At The Humphreys Group, we know that wealth management is best delivered with equal doses of expertise (the technical number crunching) and empathy (emotional intelligence). We know that addressing the non-numerical aspects of money results in better financial outcomes for our clients. If you’re interested in talking to us more about financial imposter syndrome, reach out to our team today.

The Top Money Podcasts to Add to Your List

Published in: Resources |

Podcasts have become increasingly popular over the years, but even more so during the pandemic. Spotify recently reported that podcast consumption has more than doubled. With everyone at home, people have been turning to podcasts for entertainment, information, advice, and community. We asked our Humphreys Group team what their favorite finance-related podcasts were. Here are their answers:

1. HerMoney with Jean Chatzky

2. Ellevate Podcast: Conversations With Women Changing the Face of Business

3. So Money with Farnoosh Torabi

4. Afford Anything

5. BiggerPockets Money

6. This is Uncomfortable

7. Side Hustle Pro

8. Money For the Rest of Us

9. Future Rich

10. Eye On The Market

11. Odd Lots

12. Masters in Business

13. Planet Money

14. Secrets of Wealthy Women

Financial Planning with The Humphreys Group

Let us know if there’s any other podcasts you’d recommend adding to the list! Don’t forget to check out last week’s blog post too, where we shared our favorite investment reads. Want more tips on personal finance? Check out our blog archive; every week, we share personal finance tips, commentary, and resources.

The Investment Reads You Need on Your Bookshelf

Published in: Resources |

With so much time at home during the pandemic, many of us have found ourselves reading voraciously and revisiting some of our favorite books. If you’re looking for some inspirational and educational reads in 2021, here are some of our favorite books on investing and personal finances:

1. The Investment Answer by Daniel C. Goldie and Gordon Murray

2. A Random Walk Down Wall Street by Burton Malkiel

3. On My Own Two Feet: A Modern Girl’s Guide to Personal Finance by Manisha Thakor

4. Worth It: Your Life, Your Money, Your Terms by Amanda Steinberg

 

5. Women’s Worth: Finding Your Financial Confidence by Eleanor Blayney

6. The Index Card: Why Personal Finance Doesn’t Have to Be Complicated by Helaine Olen and Harold Pollack

7. The Soul of Money: Transforming Your Relationship with Money and Life by Lynne Twist

8. Own It: The Power of Women at Work by Sallie Krawcheck

Financial Planning with The Humphreys Group

Do you have a favorite finance book to add to the list? Let us know! And if you’d like to continue the conversation about your favorite reads, join us at one of our Conversation Circles, where we have authentic conversations about personal finance beyond the numbers.

Company Stock Options and Financial Planning: What Works For You? 

Published in: Resources |

Your job likely offers you some form of equity compensation. Equity compensation can represent financial security and sustainability — but it also can come with a degree of risk. There are various factors to consider with compensation packages, such as your financial goals, taxes, and diversification strategies. In this week’s blog post, we go over the basics you should know.   

Equity Compensation 101

Equity compensation is non-cash pay offered to employees that represents ownership in a company. This includes options, restricted stock, and performance shares. Public companies and some private companies, especially startup companies, offer equity compensation to make up for lack of cash flow and attract high-quality employees.

Employee stock purchase plans (ESPPs) are company-run programs that let employees purchase company stock at a discounted price. Employees can usually contribute through payroll deductions; this typically builds up between the offering period and the purchase period.

Restricted stock unit (RSU) plans are company stock plans offered to employees as additional compensation. Instead of paying you your entire salary in cash, part of it is given to you in the form of company stock. It is usually listed alongside your base salary when you’re hired.

Stock option plans, also known as an incentive stock option (ISO), is a type of equity compensation given to employees and executives. Rather than giving you shares of stock directly, the company might offer derivative options of the stock.

The Role Of Equity Compensation In Your Financial Plan

Where does equity compensation fit into your financial plan? To understand this, you should go over the following with your financial advisor: figure out what kind of investor you are, watch out for concentrated wealth, understand the tax consequences of your investment decisions, and understand how recent tax law changes affects your wealth. This will help you make informed decisions about how to manage your equity compensation.

Work with The Humphreys Group Today

The right financial advisor can help you identify your core values, establish clear financial goals and create a financial strategy.

When you work with a financial advisor at The Humphreys Group, you’ll know that you’re working with a financial advisor that understands the importance of values. In August 2020, we earned the B Corp certification, which recognizes for-profit companies that use business as a force for good. B Corp companies are working toward reduced inequality, lower levels of poverty, a healthier environment, stronger communities, and the creation of more high-quality jobs with dignity and purpose. 

If you’d like to get started on your financial plan, reach out to our team today.

Why Mentors Are Still Important Mid-Career 

Published in: Resources |

When thinking of the typical mentor-mentee relationship, the image that comes to mind might be of a seasoned professional advising a new college grad over coffee. 

But mentorships should exist at every stage of your career. As Nilanjana Dasgupta, professor of psychology at the University of Massachusetts, says in CNN Moneypart of it is subverting our ideas of what mentorship looks like. “Mentoring doesn’t always happen in a hierarchical way,” she says. “Often, mentoring happens in bidirectional ways, and you learn different things from different people.” 

Mid-career women might feel embarrassed or nervous about seeking out a mentor, for fear of looking incompetent or being rejected. But this move does exactly the opposite. Mentorship expands your career opportunities, builds crucial connections within your professional network, creates a community of support and trust, and ultimately brings you a sense of purpose and meaning.

The benefits of mentorship are numerous, and mentorship helps break down systemic barriers within organizations: “Growing research has also shown that intentional mentorship programs have a positive impact in chipping away at the promotion or opportunity gap, gaps that keep women and people of color from advancing within organizations,” Fast Company notes.

As Seena Mortazavi, CEO of mentoring software and platform Chronus, says, We know that people really don’t get promoted without having a champion and someone that can speak about you behind closed doors. Having mentoring as a part of the employee journey helps to level the playing field so everyone has the same opportunity to progress in their careers.” 

Mentorship During a Crisis

Mentorship is especially important during this COVID-19 crisis, a time filled with uncertainty and loneliness and when mid-career women might be considering a career change. The culture of inclusion and belonging that mentorship fosters is just what mid-career women need during this stressful time.

Mentors help boost confidence during difficult times and build trust. Even if it’s just through Slack messages or Zoom calls rather than handshakes and lunch, these moments can help professionals weather through the COVID-19 crisis.

Join Us at One of Our Conversation Circles 

The Humphreys Group is passionate about connecting women at all stages of their career through our Conversation Circles.

Our circles consist of a group of 12–15 women sitting together (now virtually), and we have honest, authentic conversations about money beyond the numbers. We have discussed topics ranging from “What’s Your Worth? The Art of Advocating for Ourselves” to “Fiscal Unequals: Finding Common Ground with Friends and Family” to “What’s in Your Resilience Toolkit?” If you’re interested in joining us at our next event, reach out to us today! 

The Unique Retirement Planning Challenges That Women Face 

Published in: Resources |

Retirement planning can be a uniquely stressful and anxiety-inducing experience for women because of the financial burdens they face later in life.

Women typically live longer than men (about five years on average) and are more likely to live their final years alone. Living longer and living alone often means more health problems — which means more medical bills and potentially the need for long-term care. Women also might not have as much saved for retirement because of systemic and societal issues such as the gender pay gap and career interruptions to be the main caretaker for their children, aging parents, or other loved ones.

This financial anxiety around retirement is felt by women throughout the nation. A survey last year by the National Council on Aging and Ipsos found that fully half (51%) of women age 60 and older are worried about outliving their savings. Almost six in 10 women (59%) said they are worried about losing their independence.

Many couples do not anticipate how financially and emotionally painful these later-in-retirement expenses can be. When women don’t take part in financial planning and then lose a spouse or get a divorce, they often find out that they aren’t as prepared for retirement as they thought, or that their asset allocation is inappropriate for their level of risk tolerance.

That’s why it’s so important to regularly talk about these gender inequalities and possible scenarios with your partner and financial advisor. According to UBS, when couples do share in the financial decisions equally, they argue less about money and feel more confident in their financial future.  

A Changing Tide

Fortunately, surveys show that more married women are interested in taking a bigger role in their families’ long-term financial planning.

In a UBS survey, 64% of married women said they have a greater interest in discussing financial planning with their spouse due to COVID-19. Sixty-three percent said the crisis has affected how they think about money, and 51% said they intend to discuss their inheritance plans with their children because of the virus.

“The consistent message that we need to get across with couples is that long-term financial planning is just not something that can be delegated,” said Liz Sheehan of UBS in the Barron’s article. “You both have to be sitting at the same table for that conversation.” 

Prepare for Retirement with The Humphreys Group 

It’s important for couples to have open conversations about retirement now. A financial advisor can help facilitate these hard conversations and create a strategic comprehensive retirement plan that addresses these issues.

A financial advisor can help you with every facet of retirement planning — from Social Security optimization, addressing debt, planning for end-of-life costs for both partners, and creating a retirement plan that safeguards you from the “survivor trap.” Start planning for retirement today with The Humphreys Group. Contact us today.

Financial Tips for Starting a Family

Published in: Resources |

Starting a family is a momentous and life-changing experience — and it’s also is expensive. According to the U.S. Department of Agriculture, it can cost a middle-class family $233,610 to raise a child until they are ready to leave for college. It’s important for families to financially plan for this big step. Here are some key financial considerations and tips you should keep in mind as a new parent.

1. Several months in advance, do your research and create a new budget.

Starting a new family means dramatically adjusting your cash flow and lifestyle. Calculate items like baby clothes, food, formula, nursery items, and diapers. A significant new cost will be daycare, whether it’s a daycare facility or a nanny. Get estimates from multiple sources so you can plan effectively. Monthly full-time childcare can cost on average $1,000.

Include new medical expenses in your budget. Talk with your health insurance provider to find out how much coverage you have for hospital bills, such as ultrasounds, labor costs, vaccinations, and regular check-ups.

Try to pay off credit card debt before your child arrives. Also, establish an emergency fund. Aim to save at least three to six months of expenses.

2. Think about lifestyle changes.

In the future, you may want to buy a new home for your growing family; when your child is school age, you might want to move so they are in a good school district. Other lifestyle changes include factoring in the costs of activities like piano lessons, soccer team memberships, etc.

3. Determine how you want your child to be covered under a healthcare policy.

Having a baby is considered a “qualifying life event” that allows for a mini open enrollment period so you can make changes to your health coverage. If both parents are working, view each of your employer’s benefits to see which plan is most advantageous for the delivery and ongoing care.

Increase your Health Savings Account (HSA) contributions. HSAs are available to those in high-deductible health plans; it can can be used to pay for a variety of medical expenses. HSAs are different from Flexible Spending Accounts (FSAs) for medical expenses in that there is no “use it or lose it” provision; there’s no time frame in which you are required to spend the money.

4. Research your employer benefits.

Does your employer offer paid parental leave or a FSA (which allows you to save money for medical expenses pre-tax)? Talk to your company HR department. With a FSA, you can have additional money withheld to cover the cost of daycare expenses. This will make some of the expenses come out pre-tax and lower your taxable income.

If your employer offers a 401(k) retirement account, contribute to it so you can prepare for retirement. Many employers also offer a 401(k) match; find out about the contribution match levels.

5. Plan for your child’s education.

Start setting aside money to cover college costs.  Talk to your financial advisor about tax-advantaged education savings vehicles such as 529 college savings plans.

6. Know of tax breaks.

Know of the tax benefits of having a child. The Child Tax Credit (CTC) provides a $2,000 tax credit per child, subject to an income phase-out starting at $200,000 for individual filers and $400,000 for joint filers. Research the Child & Dependent Care Credit if you are planning on using some form of childcare,. This reduces your tax liability by up to $2,100 if you have two or more dependents and have incurred more than $6,000 of qualified expenses.

7. Review your life insurance needs.

If you pass away, life insurance can bring your family some financial security by replacing the income needed to maintain their lifestyle. It can also help with outstanding debts, mortgages, and your child’s education. Two types of life insurance policies to consider are term and permanent. Talk with a financial professional to find the right life insurance policy for your family. Also consider disability insurance to replace lost income.

8. Have an estate plan in place.

An estate plan will protect your family’s future. Make sure you have the following in place: a will, a durable power of attorney (DPOA), a health care proxy, and a living will. Update beneficiary designations on accounts to include your child.

9. Talk to a financial advisor.

Talk with a financial advisor to protect your finances — now and for in the future.

Financial Planning with The Humphreys Group

Starting a family is one of the biggest and most exciting transitions in life. Reach out to The Humphreys Group today to start financial planning.

Retirement Planning: What Women Should Know about Social Security

Published in: Resources |

It’s no secret that women face greater economic challenges in retirement than men: women live longer, often have lower lifetime earnings, and may reach retirement with smaller pensions and other assetsThis has all been exacerbated by the pandemic recession, which has been so disproportionately damaging to women’s careers that experts are calling it a “shecession.” 

With this gender gap in retirement security, it’s important for women to be financially knowledgeable so they can best prepare themselves for retirement. Below, we share 5 things women should know about Social Security. Also, note that while Social Security is important for a secure retirement, it only replaces about 40 percent of pre-retirement earningsyou will also need to have other income from pensions, savings, and investments. 

1. Nothing prevents you from getting Social Security benefits. You may be eligible for your own benefits if you’ve worked and paid taxes into the Social Security system for at least 10 years and have earned a minimum of 40 work credits. Whether you’re married or not and whether your spouse collects Social Security or notyou may be eligible for your own Social Security benefit once you’re 62 years old.

2. There’s no marriage penaltyIf you are married and you and your spouse have worked and earned enough credits on your own, you will each get your own Social Security benefit. A working woman is not limited to onehalf of her spouse’s Social Security.

3. If you qualify for two benefits, you get the one that pays the higher rate — not bothYou are potentially eligible for benefits on both your own and your spouse’s work record, but you only receive the higher rate. If you don’t have your own work record, you are eligible for between one-third and one-half of your spouse’s Social Security benefit. Most working women receive their own Social Security benefit amount because it’s more than one-third to one-half of their spouse’s rate.

4. If you’re divorced and were married at least 10 years, you’re eligible on your ex’s Social Security recordDivorced women who were married at least 10 years are eligible for Social Security based on their ex’s record, if they are unmarried when they become eligible for Social Security.  

5. You’re eligible for a widow’s benefit when your spouse or ex diesAt age 60, a widow is eligible for 71 percent of what the spouse was getting before they died; at full retirement age, the window is eligible for 100 percent. The Social Security Administration pays your own retirement benefit first, then supplements it with the extra benefits you are due as a widow to bring your Social Security benefit amount up to the widow’s rate.  

Retirement Planning with The Humphreys Group 

The Humphreys Group is passionate about helping women harness their innate financial strengths through an honest, empathetic, and smart approach to wealth management. Want to learn more about retirement planning? Reach out to our team today.

Tips on Broaching Money Conversations with Aging Parents During the Pandemic

Published in: Resources |

The COVID-19 crisis has been stressful for everyone. We’re all feeling its effects — emotionally, mentally, physically, socially, and financially. But the pandemic has been especially hard on the “sandwich generation” — a term used to describe middle-aged adults who care for both elderly parents and children.

Nearly half (47%) of adults ages 40 to 59 are dual caregivers, attending to the financial, domestic, and emotional needs of their elderly parents and children. And women in the sandwich generation usually are the ones shouldering this dual caretaker responsibility.

Tips for Talking about Money with Your Elderly Parents

If you’re part of the sandwich generation and need to broach uncomfortable money topics with your parents during the pandemic, how can you do it tactfully and successfully? Here are a few tips:

Be sensitive and careful when offering financial guidance. Your parents likely don’t want to be a burden and/or lose their independence. Saying “Do you need help with your finances?” may sound like you don’t think they are capable of doing it on their own. Instead, convey that you want them to be best prepared in case something were to happen, says Credit Karma co-founder and Chief Executive Ken Lin in the Wall Street Journal. This makes it more about you instead of them.

Be gentle in your approach and consider that your parents may well have everything under control. That said, there are a lot of current changes to keep track of with market volatility and government bailout packages, and it can be helpful to make sure that everyone is up-to-date on the most recent legislation. Keep things organized and factual. Share information and include your parents in any decisions.

The CARES Act has included some provision for retirees that you will want to talk to your parents about:

  • Required minimum distributions (RMDs) have been suspended for 2020. (Keep in mind that if your parents already took their RMD for 2020, they cannot reverse it.)
  • There are no penalties for early withdrawals from IRAs or other retirement accounts.
  • If they’re receiving Social Security, they aren’t required to file a tax return to receive their stimulus check. Stimulus checks have started to be paid by direct deposit so remind them to check their bank accounts.
  • They can receive extra incentives this year for making charitable contributions, including the application of a special limit for gifts to public charities of 100% of their adjusted gross income (AGI).

Ease into the process of taking over their finances. Start with gradual steps, such as adding your name to your parents’ bank accounts, making copies of important documents, and getting their financial advisor’s contact information.

Make sure they have the necessary documents. Your parents need a power of attorney in the event they ever become incapacitated and can’t make a decision on their own. If notarizing the documents in-person is not an option, look into if your state allows legal documents to be witnessed or notarized virtually.

Review all financial-related documents, such bank and brokerage statements, insurance policies, wills, health-care proxies and car titles. Gather Social Security numbers, passwords, and bank PINs.

Assess cash flow. Understand their sources of income, such as pensions, Social Security, or investments. Also, do they have an emergency fund to fall back on?

Dust off the budget and review spending. It is likely that our spending habits have changed during shelter-at-home orders, but some fixed costs may still need to be covered depending on your parents’ situation. It is always good practice to review spending and cash flow including where to cut back since this is one of those emergency times for which we contingency plan. Make a list of recurring bills; take note of which bills are automatically withdrawn from their accounts or charged to a credit card.

Revisit investment accounts. Are they being proactive with strategies such as rebalancing their portfolio and tax-loss harvesting?

Protect them from scammers. There’s been an uptick of scams during the COVID-19 crisis. According to the FTC, in the first nine months of 2020, victims lost $150 million to phony offers of job training, work-from-home schemes, or investment opportunities.

Protect your parents from scams by being the “trusted contact” on all of their accounts, the Wall Street Journal suggests. Review their accounts monthly and set up automatic payment for as many bills as possible. Also, consider registering their phone number with the National Do Not Call Registry.

Reassure them and remember that it’s a good strategy to keep focused on one’s financial plan and goals while tuning out the noise.

Financial Planning with The Humphreys Group

The Humphreys Group provides financial planning to clients in-person (during the “before times”)  and remotely throughout the country. Our expertise is helping women navigate their particular challenges — such transitions as marriage, divorce, widowhood, inheritance, and taking care of aging parents. Our passion is helping clients take control of their financial lives and get smart about money. Interested in becoming a Humphreys Group client? Reach out to our team today.