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Flipping a Switch: Navigating Later Life
Transitions and COVID-19
Dr. Barbara O’Neill, CFP®
Owner/CEO, Money Talk
moneytalk1@juno.com
boneill@njaes.rutgers.edu
https://www.moneytalkbmo.com/
https://moneytalk1.blogspot.com/
@moneytalk1
My Post-Rutgers Life:
Financial Education
Entrepreneurship in Florida
Flipping a Switch is About
35 Later Life Transitions
Amazon Ordering Page:
https://www.amazon.com/gp/product/1620236869
Inspiration #1 to Delve
Into This Topic
Personal experience: Rutgers Cooperative
Extension and New Jersey is in my “rear view
mirror” after 41 years
Inspiration #2 to Delve
Into This Topic
Research presentation at the 7/18 ASEC
meeting about Spending in Retirement (Lori
Lucas)
Described a subset of retirees with a unique
“problem”: they saved their whole life, are
not comfortable spending, and assets keep
growing
Speaker quote: “We need financial
education to teach people how to ‘flip a
switch’ from saving to spending”
Inspiration #3 to Delve
Into This Topic
Grasshoppers and Ants in Retirement article
(Finke, Guo, & Johnson, AAII Journal, 6/18):
https://www.aaii.com/journal/article/grasshoppers-and-ants-in-
retirement
Describes thrifty “ants” who spend less in
retirement than they are financially able to
Excessive thrift puzzle: why did they save all
their money if they’re not going to spend
more?
“Habit formation hypothesis”: people get
accustomed to a certain lifestyle and
spending habits are hard to break
I Then Realized… There are
Multiple “Switches” That
Need to Be Flipped in Later
Life (Not Just For Spending)
Some Transitions Are Like
“Dimmer Switches” and
Change Over Time
Working
Spending
Investment asset allocation
Downsizing
Disengagement/engagement activities
Simplification
Three Book Sections
 Financial Transitions
 Social Transitions
 Lifestyle Transitions
Amazon Link:
https://www.amazon.com/gp/pr
oduct/1620236869
Written From “A Place
of Privilege” One-third of workers
have saved nothing
for retirement
35% of workers have
< $25,000 saved,
including 18% with <
$1,000 saved
Source: 2020 Retirement
Confidence Survey:
https://www.ebri.org/docs/defa
ult-source/rcs/2020-rcs/rcs_20-fs-
3_prep.pdf?sfvrsn=f0bc3d2f_6
Flipping a Switch
Podcasts and Webinars
Podcast Interviews
 The Military Money Expert - March 2, 2020
 Money Mammals - July 10, 2020
 Wine and Dime- July 17, 2020
Print Media Interviews
 How to Mentally Prepare for Retirement- July 9, 2020
 With Remote Work Flexibility, Some People Opt to Relocate Ahead of
Their Retirement-September 21, 2020
Webinars
 Flipping a Switch (University of Arkansas)-4/22/20
 Navigating the Two Financial Faces of COVID-19 (Rutgers Cooperative
Extension)- 8/31/20
COVID-19 Bifurcated
Financial Impacts: Major
Trauma and “Financially
Unscathed”
COVID-19 Trauma Impact
Loss of income
Food Insecurity
Depletion of savings
End of moratoriums (e.g., utilities, evictions)
Benefit access issues (e.g., unemployment)
Inability to access social support networks
Travel and COVID-19 quarantine restrictions
Multi-generational health concerns
The “Financially Unscathed”
Little or no asset value loss
Increased savings rate
Decreased expenses (e.g., commuting)
Continued or even increased income
Spending freely on home improvements
Other impacts, however….
(Boredom, “survivor’s guilt,” anxiety, sadness
about missed opportunities, mental health)
What Many Experts Are Predicting
NOT a “V” shaped
recovery
NOT a “W”
shaped recovery
NOT a “U” shaped
recovery
But… a “K”
shaped recovery
Source: COVID-19 is Dividing the
American Worker, The Wall Street
Journal,
https://www.wsj.com/articles/covi
d-19-is-dividing-the-american-
worker-11598068859
Covid-19 Financial Resources
Coronavirus Anxiety Workbook (The Wellness
Society):
https://thewellnesssociety.org/wp-content/uploads/2020/04/Coronavirus-
Anxiety-Workbook-1
Financial Reality Coping eBook (Center for
Financial Social Work):
https://financialsocialwork.com/downloads/financial-reality-coping-ebook
Money Talk Blog (Dr. Barbara O’Neill):
https://moneytalk1.blogspot.com/ (many COVID posts)
Your Money: A Hub for Help During the
Coronavirus Storm (The New York Times):
https://www.nytimes.com/article/coronavirus-money-unemployment.html
Later Life and COVID-19
Action Steps: 20 Similarities
Source:
In Quarantine, a Glimpse
of What retirement Might
Look Like, Wall Street
Journal:
https://www.wsj.com/arti
cles/in-quarantine-a-
glimpse-of-what-
retirement-might-look-
like-11587135637
1. If You Don’t Spend Your
Money, Someone Else Will
 Step outside of your spending comfort zone
 Automate savings withdrawals
 Answer some hard questions:
 Why did you amass savings if you aren’t
going to spend it?
 If you don’t spend your money, who will?
 What are you waiting for?
2. Deciding When You Have
“Enough”
 Do some savings calculations
FINRA Retirement Calculator:
https://tools.finra.org/retirement_calculator/
 Hire a financial advisor
Try a Monte Carlo Calculator
3. Creating a “Paycheck”
 Set up automatic withdrawal plans (mutual funds)
 Create a bond or CD “ladder’
 Purchase an annuity
Amend the “4% Rule”
4. Later Life Investing
 Assess your risk tolerance
http://pfp.missouri.edu/research_IRTA.html
 Rebalance asset class weights regularly
Beware of “free meal” seminars
5. Adjusting to Changes
in Income and Expenses
 Work longer and/or spend less
Consider geographic arbitrage
Tap home equity
Reverse mortgage
Sale-Leaseback
6. Tax Withholding: It’s
What You Get to Keep
 Request income tax withholding services
 Determine your new marginal tax rate
 Time elective cash withdrawals
Consider hiring a tax professional
7. Becoming a Social
Security Beneficiary
 Get a Social Security benefit estimate
 Make estimated payments for Social
Security taxes
Beware of the earnings limit
Take care of your spouse
8. Health Care Transitions
 Take care of yourself (2,500 extra hours)
 Earmark part of nest egg for health care
Learn about Medicare and supplements
Expect “sticker shock” if transitioning from an
ACA plan with premium subsidies
9. Setting New Financial
Goals
 Set “through retirement” financial goals
 Go “first class” with upgrades if you can
afford it
 Develop spending action plans
Automate spending and gifting
10. You Can’t Take It With
You (Philanthropy)
 Check out potential charities
 Specify a purpose
 Plan your donations (gifting budget)
Use tax-advantaged strategies (bunching,
QCDs, donor advised funds, trusts)
11. Financial Organization
and Simplification
 Create a financial inventory
 Consolidate “like” financial assets
 Cull automated payments
 Gym
Newspapers
Satellite radio
12. Becoming “Fraud Bait”
 Use caution with “free meal” seminars
 Recognize “red flag language
 Power down on tech scams
Never sign forms with blank spaces
13. Answering the “What
Do You Do?” Question
 Dodge the “R words”; don’t let other people
impose their social clocks on you
 Practice “identity bridging”
Continue valued commitments
Develop a new “elevator speech”
14. Changed Relationships
With Family and Friends
 Identify separate and “together’ activities
 Create a personal space
Define your boundaries
Share your future vision with family/friends
15. FINDing Fulfillment
After Full-Time Work
 Leave work with a plan
Don’t disappear for long
Cherry-pick work that you like
Expect Ageism, OK Boomer?
16. Getting Help, When
Needed
 Find free local financial education
resources
Hire a financial planner
Interview services and go with your gut
Lock down your house
17. A New Definition of
“Busy”
 Schedule around “Big Rocks”
 Redefine “productivity”
 Set goals as “guardrails”
 Stay connected with others
18. Should I Stay (Put) or
Should I Go?
 Do pre-move research
Consider family implications and
expectations
Consider SALT (taxes)
Build strong relationships
19. Invincible to Vulnerable
 Accept your vulnerability
Stave off disease and delay
Follow healthy lifestyle recommendations
Get recommended vaccines and
screening tests
20. Planning a Good
Ending
 Envision your “good ending”
 Take action on your vision
 Tie up loose ends (personal & financial)
 Prepare an “after I’m gone” list
Organize financial records
Positive COVID-19 Related
Changes That Should
Continue “On the Other Side”
 Hand-washing, wipes to clean surfaces, and plexi-glass use
 Addressing “underlying conditions”
 Increased savings rate
 Formal budgeting
 Attention to estate planning
 Carving out time for physical activity
 Time savings from reduced commuting and WFH
 Slower-paced life and more family meals together
 Increased philanthropy
 More online learning opportunities
Best Wishes With All of the
“Flipped Switches” in
Your Life
Questions and Comments?
@moneytalk1
moneytalk1@juno.com
https://www.moneytalkbmo.com

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Navigating Later Life Transitions and COVID-19

  • 1. Flipping a Switch: Navigating Later Life Transitions and COVID-19 Dr. Barbara O’Neill, CFP® Owner/CEO, Money Talk moneytalk1@juno.com boneill@njaes.rutgers.edu https://www.moneytalkbmo.com/ https://moneytalk1.blogspot.com/ @moneytalk1
  • 2. My Post-Rutgers Life: Financial Education Entrepreneurship in Florida
  • 3. Flipping a Switch is About 35 Later Life Transitions Amazon Ordering Page: https://www.amazon.com/gp/product/1620236869
  • 4. Inspiration #1 to Delve Into This Topic Personal experience: Rutgers Cooperative Extension and New Jersey is in my “rear view mirror” after 41 years
  • 5. Inspiration #2 to Delve Into This Topic Research presentation at the 7/18 ASEC meeting about Spending in Retirement (Lori Lucas) Described a subset of retirees with a unique “problem”: they saved their whole life, are not comfortable spending, and assets keep growing Speaker quote: “We need financial education to teach people how to ‘flip a switch’ from saving to spending”
  • 6. Inspiration #3 to Delve Into This Topic Grasshoppers and Ants in Retirement article (Finke, Guo, & Johnson, AAII Journal, 6/18): https://www.aaii.com/journal/article/grasshoppers-and-ants-in- retirement Describes thrifty “ants” who spend less in retirement than they are financially able to Excessive thrift puzzle: why did they save all their money if they’re not going to spend more? “Habit formation hypothesis”: people get accustomed to a certain lifestyle and spending habits are hard to break
  • 7. I Then Realized… There are Multiple “Switches” That Need to Be Flipped in Later Life (Not Just For Spending)
  • 8. Some Transitions Are Like “Dimmer Switches” and Change Over Time Working Spending Investment asset allocation Downsizing Disengagement/engagement activities Simplification
  • 9. Three Book Sections  Financial Transitions  Social Transitions  Lifestyle Transitions Amazon Link: https://www.amazon.com/gp/pr oduct/1620236869
  • 10. Written From “A Place of Privilege” One-third of workers have saved nothing for retirement 35% of workers have < $25,000 saved, including 18% with < $1,000 saved Source: 2020 Retirement Confidence Survey: https://www.ebri.org/docs/defa ult-source/rcs/2020-rcs/rcs_20-fs- 3_prep.pdf?sfvrsn=f0bc3d2f_6
  • 11. Flipping a Switch Podcasts and Webinars Podcast Interviews  The Military Money Expert - March 2, 2020  Money Mammals - July 10, 2020  Wine and Dime- July 17, 2020 Print Media Interviews  How to Mentally Prepare for Retirement- July 9, 2020  With Remote Work Flexibility, Some People Opt to Relocate Ahead of Their Retirement-September 21, 2020 Webinars  Flipping a Switch (University of Arkansas)-4/22/20  Navigating the Two Financial Faces of COVID-19 (Rutgers Cooperative Extension)- 8/31/20
  • 12. COVID-19 Bifurcated Financial Impacts: Major Trauma and “Financially Unscathed”
  • 13. COVID-19 Trauma Impact Loss of income Food Insecurity Depletion of savings End of moratoriums (e.g., utilities, evictions) Benefit access issues (e.g., unemployment) Inability to access social support networks Travel and COVID-19 quarantine restrictions Multi-generational health concerns
  • 14. The “Financially Unscathed” Little or no asset value loss Increased savings rate Decreased expenses (e.g., commuting) Continued or even increased income Spending freely on home improvements Other impacts, however…. (Boredom, “survivor’s guilt,” anxiety, sadness about missed opportunities, mental health)
  • 15. What Many Experts Are Predicting NOT a “V” shaped recovery NOT a “W” shaped recovery NOT a “U” shaped recovery But… a “K” shaped recovery Source: COVID-19 is Dividing the American Worker, The Wall Street Journal, https://www.wsj.com/articles/covi d-19-is-dividing-the-american- worker-11598068859
  • 16. Covid-19 Financial Resources Coronavirus Anxiety Workbook (The Wellness Society): https://thewellnesssociety.org/wp-content/uploads/2020/04/Coronavirus- Anxiety-Workbook-1 Financial Reality Coping eBook (Center for Financial Social Work): https://financialsocialwork.com/downloads/financial-reality-coping-ebook Money Talk Blog (Dr. Barbara O’Neill): https://moneytalk1.blogspot.com/ (many COVID posts) Your Money: A Hub for Help During the Coronavirus Storm (The New York Times): https://www.nytimes.com/article/coronavirus-money-unemployment.html
  • 17. Later Life and COVID-19 Action Steps: 20 Similarities Source: In Quarantine, a Glimpse of What retirement Might Look Like, Wall Street Journal: https://www.wsj.com/arti cles/in-quarantine-a- glimpse-of-what- retirement-might-look- like-11587135637
  • 18. 1. If You Don’t Spend Your Money, Someone Else Will  Step outside of your spending comfort zone  Automate savings withdrawals  Answer some hard questions:  Why did you amass savings if you aren’t going to spend it?  If you don’t spend your money, who will?  What are you waiting for?
  • 19. 2. Deciding When You Have “Enough”  Do some savings calculations FINRA Retirement Calculator: https://tools.finra.org/retirement_calculator/  Hire a financial advisor Try a Monte Carlo Calculator
  • 20. 3. Creating a “Paycheck”  Set up automatic withdrawal plans (mutual funds)  Create a bond or CD “ladder’  Purchase an annuity Amend the “4% Rule”
  • 21. 4. Later Life Investing  Assess your risk tolerance http://pfp.missouri.edu/research_IRTA.html  Rebalance asset class weights regularly Beware of “free meal” seminars
  • 22. 5. Adjusting to Changes in Income and Expenses  Work longer and/or spend less Consider geographic arbitrage Tap home equity Reverse mortgage Sale-Leaseback
  • 23. 6. Tax Withholding: It’s What You Get to Keep  Request income tax withholding services  Determine your new marginal tax rate  Time elective cash withdrawals Consider hiring a tax professional
  • 24. 7. Becoming a Social Security Beneficiary  Get a Social Security benefit estimate  Make estimated payments for Social Security taxes Beware of the earnings limit Take care of your spouse
  • 25. 8. Health Care Transitions  Take care of yourself (2,500 extra hours)  Earmark part of nest egg for health care Learn about Medicare and supplements Expect “sticker shock” if transitioning from an ACA plan with premium subsidies
  • 26. 9. Setting New Financial Goals  Set “through retirement” financial goals  Go “first class” with upgrades if you can afford it  Develop spending action plans Automate spending and gifting
  • 27. 10. You Can’t Take It With You (Philanthropy)  Check out potential charities  Specify a purpose  Plan your donations (gifting budget) Use tax-advantaged strategies (bunching, QCDs, donor advised funds, trusts)
  • 28. 11. Financial Organization and Simplification  Create a financial inventory  Consolidate “like” financial assets  Cull automated payments  Gym Newspapers Satellite radio
  • 29. 12. Becoming “Fraud Bait”  Use caution with “free meal” seminars  Recognize “red flag language  Power down on tech scams Never sign forms with blank spaces
  • 30. 13. Answering the “What Do You Do?” Question  Dodge the “R words”; don’t let other people impose their social clocks on you  Practice “identity bridging” Continue valued commitments Develop a new “elevator speech”
  • 31. 14. Changed Relationships With Family and Friends  Identify separate and “together’ activities  Create a personal space Define your boundaries Share your future vision with family/friends
  • 32. 15. FINDing Fulfillment After Full-Time Work  Leave work with a plan Don’t disappear for long Cherry-pick work that you like Expect Ageism, OK Boomer?
  • 33. 16. Getting Help, When Needed  Find free local financial education resources Hire a financial planner Interview services and go with your gut Lock down your house
  • 34. 17. A New Definition of “Busy”  Schedule around “Big Rocks”  Redefine “productivity”  Set goals as “guardrails”  Stay connected with others
  • 35. 18. Should I Stay (Put) or Should I Go?  Do pre-move research Consider family implications and expectations Consider SALT (taxes) Build strong relationships
  • 36. 19. Invincible to Vulnerable  Accept your vulnerability Stave off disease and delay Follow healthy lifestyle recommendations Get recommended vaccines and screening tests
  • 37. 20. Planning a Good Ending  Envision your “good ending”  Take action on your vision  Tie up loose ends (personal & financial)  Prepare an “after I’m gone” list Organize financial records
  • 38. Positive COVID-19 Related Changes That Should Continue “On the Other Side”  Hand-washing, wipes to clean surfaces, and plexi-glass use  Addressing “underlying conditions”  Increased savings rate  Formal budgeting  Attention to estate planning  Carving out time for physical activity  Time savings from reduced commuting and WFH  Slower-paced life and more family meals together  Increased philanthropy  More online learning opportunities
  • 39. Best Wishes With All of the “Flipped Switches” in Your Life