Best Social Security Claiming Strategies For Working Spouses?

By: Michelle Buonincontri, CFP®, CDFA

Q: My husband retired from the military after 30 years of service. He turned 72 November 24, 2018. He receives his Social Security check, a check from the Veterans Affairs, and he also receives multiple pensions. I still work but I don't make a lot of money. Am I entitled to early Social Security on his behalf?

A: There's some information we need to answer your question specifically, said Michelle Buonincontri, a certified financial planner with and founder of Being Mindful in Divorce.

For instance, you didn't mention your age and there are many nuances that apply around Social Security eligibility and benefits, said Buonincontri.

In general, however, there are two "retirement" benefits available to you as a "married working" person (depending on your age):

  1. A benefit based on your own earning record, called a retirement insurance benefit (RIB)

  2. A spousal benefit based on your husband's earning record, called a disability insurance benefit (DIB)

There are two other Social Security benefits known as Retroactivity for widow(er)'s insurance benefits (WIB) and Retroactivity for Disability Insurance Benefit (DIB), which are outside the scope of this question.

According to Buonincontri, the rule for a spousal Insurance benefit (SIB), states that if you are at least age 62 and your spouse is already receiving retirement benefits or disability insurance benefits (DIB), you can receive a spousal benefit of "up to" 50% of your spouse's eligible full retirement age (FRA) "base" Social Security benefit, or primary insurance amount (PIA) at their (FRA). A spousal benefit will not include any delayed retirement benefit credits (DRCs) your husband may be receiving or entitled to (See considerations below.)

"In your scenario, your husband is already receiving benefits and you would be 'deemed' to be applying for both a 'spousal benefit' (SIB) and your own 'retirement benefit' at the same time," said Buonincontri. "This means that Social Security will always pay your benefit first based on your earnings record, and then if your spousal benefit is higher, you will get a combination of funds equaling the higher amount of the spousal benefit."

Buonincontri gave this example: If your retirement benefit was $1,000, and your spousal benefit was $1500 (50% of your spouse's $3,000 based benefit), you would receive $1,500. This is $1,000 based on your record and a spousal benefit of $500

Note, however, had your spouse not already filed for benefits, you would not be deemed as filing for a spousal benefit (SIB) at this time - just a retirement benefit (RIB) of $1,000 based on your earning record, said Buonincontri. Then in the future when your spouse applied for benefits, the spousal benefit rules would apply and if that spousal amount was larger than your own benefit ($1,500 is greater than $1,000), your benefit would automatically be increased to ($1,500 in this example) to cover that additional money, she said.

Note too, said Buonincontri, this consideration that may reduce your benefit: If you begin receiving benefits at least age 62 and file before your FRA, your spousal benefit will be "permanently" reduced for each month you are filing early and your benefit will not increase when you reach your FRA; making your spousal benefit less than 50% of your spouse's full retirement "base" benefit or PIA. "Additionally, if your husband delayed receiving Social Security benefits past his FRA, for example to age 69 or 70, so that he would get a bigger check, you are not entitled to a spousal benefit based on his delayed retirement credits or DRCs, said Buonincontri. "So, his base benefit at his FRA will be less than what he is receiving and your percentage will be based on a lower amount, meaning a smaller benefit for you."

Buonincontri also issued a caution: Filing for early benefits "before" your FRA, will prevent you from utilizing claiming strategies that might allow you to switch between benefits. "For example, as a widow you could take a Widow Insurance Benefit (WIB) and later switch to your own retirement benefit or RIB in the future if that benefit was larger," she said. "You lose this option if you choose to receive a spousal benefit before your FRA."

  • At FRA - a spousal benefit cannot exceed 50% of your spouse's full retirement benefit

    • If you were born before Nov. 1, 1954, then after your FRA you can choose a "restrict and suspend" strategy, said Buonincontri. "This would allow you to file a restricted application to receive only a spousal benefit now and delay receiving a retirement benefit based on your own earnings record until a future date - maybe age 70, when you benefit is larger due to delayed retirement credits or DRCs," she said.

    • Unfortunately, due to Social Security changes that went into effect Nov. 2, 2015 - those born on or after Jan. 2, 1954 cannot file a "restricted" application to only receive spousal benefits, said Buonincontri. "Instead you will automatically be filing for 'all' benefits that you are eligible for and don't have the opportunity for your retirement benefit based on your earnings record to grow," she said.

Your spousal benefit may be reduced for other reasons as well, said Buonincontri. "For instance, you mentioned that you are working," she said. "The amount of Social Security benefit based on your spouse's earning record or PIA may be reduced if you are entitled to a pension from previous work, not covered by Social Security under the Government Pension Offset or GPO. Additionally, she said, your benefit can be reduced if you have a child eligible for benefits under your spouse's earning record as there is a "maximum amount" that can be paid to family members.

"As you can see this is complicated," said Buonincontri. "There are too many opportunities to make an uninformed decision and in turn not maximize your benefit," she said. "This decision is irreversible and applying online limits your options, as the restricted application option is not available."

Buonincontri's best advice: Make an appointment at your local Social Security office and explore all options at your age, any benefits of delaying and receiving at a different time, as well as inquiring and understanding if the "restrict and suspend/defer" option under a "restricted" application is available and makes sense for you.

Got questions about the new tax law, Social Security, Medicare, retirement, investments, or money in general? Want to be considered for a Money Makeover? Email: Robert.Powell@TheStreet.com. Kim McSheridan assisted with this report.

This article originally appeared as Ask Bob: Best Social Security Claiming Strategies For Working Spouses? on The Street.


Michelle Buonincontri Circle Headshot.png

Michelle Buonincontri is the Founder of Being Mindful in Divorce. She’s a divorced single mom, passionate about using her professional experience as a CFP® & CDFA™ and personal journey to support women in transition; creating confidence through education so they can make financial choices with peace of mind. Bringing together a background in investment management, tax prep and retirement planning, to provide Divorce planning (with singles or couples) and Financial Coaching services, financial literacy workshops and writings.

3 Tips to Reduce Later Life Divorce from Wreaking Havoc on your Retirement Plan

By: Michelle Buonincontri, CFP®, CDFA

A laterlife divorce can wreak havoc on even the most well-thought out retirement plan -  as there is little time to amass assets and recover from the loss of previously anticipated retirement income.

"Gray" divorces — among couples 50 and up, or "Boomers" – have been on the rise, with about 25% (one in every four divorces) occurring to people over the age of 50 according to a study by the National Center for Family and Marriage Research at Bowling Green State University . It has been said that 50% of first marriages end in divorce, and the numbers are even higher for second and third marriages

So what can you do?

Manage Expectations

During this time, managing expectations is paramount. The income that once supported one household, is most likely now supporting two. A spouse may need to consider working longer (delaying retirement), modifying living expenses and discretionary spending. Many times, one spouse may be entering the workforce – either again after many years or even for the first-time. Life will be different post-divorce. This can be scary and stressful, and decisions tend to me made on emotions rather than facts. Ensure you have others in your life to help support you during this difficult time. Consider Mediation as a resolution alternative, maybe join a support group or yoga, be "mindful" of emotions, and try to keep "healing" as a central theme as you weigh choices.

Create an Asset Inventory

Unfortunately, the spouse that was non-working, “less-monied” or the care-taker - suffers the most financially in a divorce, as they have less saved for retirement. Understand that all marital assets can become "potential" retirement assets; even ambiguous employment benefits such as bonuses, stock options, deferred compensation, health benefits, the future income stream of pensions, and Health Savings Accounts (H.S.A.’s). If these assets aren't specifically identified, or you don't understand them, the success of a retirement plan may even be compromised - as there is no "re-do" in divorce.

Understand the Value of What you Are Really Entitled to

Decisions regarding the identification of marital & separate property (and their growth during the marriage), retirement asset valuation, asset division and tax implications become so important as pension benefits and social security will be less in a single household, and health-care costs may now become a concern (whereas before they may not have been due to spousal benefits). Pensions and Social Security benefits increase the likelihood of successfully meeting your needs in retirement and are considered "safer streams of income", so they are an important part of your plan after divorce. All these need to be considered in the Divorce planning process as they have a large impact on the success of your new post-divorce retirement plan.

Working with ac CDFA™ (Certified Divorce Financial Analyst) can help with understanding the short and long term cash-flow and net-worth effects of various options and settlement scenarios -  so that decisions can be made that minimize the financial impact on a retirement plan and provide longer term peace of mind.  

Both the IDFA (Institute for Divorce Financial Analysts)  and the ADFP (Association of Divorce Financial Planners) can be resources for finding a CDFA™ (Certified Divorce Financial Analyst)  professional to support you during this time of transition.

This article originally appeared on LinkedIn.


Michelle Buonincontri Circle Headshot.png

Michelle Buonincontri is the Founder of Being Mindful in Divorce. She’s a divorced single mom, passionate about using her professional experience as a CFP® & CDFA™ and personal journey to support women in transition; creating confidence through education so they can make financial choices with peace of mind. Bringing together a background in investment management, tax prep and retirement planning, to provide Divorce planning (with singles or couples) and Financial Coaching services, financial literacy workshops and writings.

Rebuilding Your Financial Future After Divorce

By: Michelle Buonincontri, CFP®, CDFA

If you are like most, your divorce ends with debt, and the last thing we are thinking about is retirement. I know, I've been there; nothing kills a retirement plan like a divorce. There are no student loans or government bailouts to help us.

According to a report released by the National Institute on Retirement Security on March 1, 2016, 80% of women over 64 are already more likely to live an impoverished life than men.

So what’s a gal to do?

Cut Discretionary Spending

This might sound obvious, but life is not the same. The income that once supported one household may now be supporting two, and you may be entering the workforce again or for the first time. Things will need to change, and you are the catalyst for that change!

For example, renting instead of owning a home may make more sense, even if just in the interim to keep expenses down. We need to remove the emotion from our financial decisions and take a longer range view.

Take Advantage of Any Employer Retirement Match

Many employers offer workplace savings plans that match employee contributions—often up to 6% of your salary. Execute the strategy above so you may contribute enough to your tax-deferred employer plan to earn 100% of the employer match in a 401(k), 401(b) or 457 plan. Earning the match is like receiving a 100% return on your investment. Where can you find a 100% return? This will help your nest egg grow and boost your retirement security. Not contributing enough to utilize the employer match is like leaving free money on the table.

View Your Divorce Debt Like An Investment

Like a what? I know that intuitively does not make sense. But there are competing resources for paying off debt and saving. Start by comparing the interest rate on the debt to that of an expected investment return and the power of compounding of retirement savings.

If, for example, your student loan or mortgage has a before-tax interest rate of 3–5 % (which may be even less after a tax deduction) and you can reasonably earn 5% with compounding over a longer time horizon in retirement, it may make more sense to put money in your retirement account than pay off that debt early—always considering cash flow and remembering that market returns are not certain. 

But if your credit card is charging 10%, put more money there. Once you stop paying that 10% it’s like earning 10%, because it is no longer being spent and is available in your budget for other items. Look at the interest rates you are paying like market returns that are leaving your pocket, and try to consolidate debt into a lower interest rate whenever possible.

Get in Touch With Where You Are in Your Story

What is going on for you right now, in this moment? Are you living in the past with regret, bringing the past into the present, or maybe even living in the future with fear?  What messages have you taken in and believe about yourself? This can be scary. For me, being grateful for what I have, acknowledging a point of view or a set of expectations I have of a situation, or others that are coloring my perspective, is freeing. Once done, I can choose to see things differently and I can choose to take actions so that I may be the architect of my life.

When we are not blaming and we are choosing, it can be very empowering!

Yes, these are the basics. We need to lay the foundation before we can move onto planning strategies. Consult a certified financial planner for comprehensive advice on strategies that address your retirement planning needs.

This article originally appeared on Investopedia.


Michelle Buonincontri Circle Headshot.png

Michelle Buonincontri is the Founder of Being Mindful in Divorce. She’s a divorced single mom, passionate about using her professional experience as a CFP® & CDFA™ and personal journey to support women in transition; creating confidence through education so they can make financial choices with peace of mind. Bringing together a background in investment management, tax prep and retirement planning, to provide Divorce planning (with singles or couples) and Financial Coaching services, financial literacy workshops and writings.

Six Financial To-Do’s (and Don’ts) of Wedding Planning

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by Stacy Francis, CFP®, CDFA

From choosing decorations and centerpieces, to deciding on the dream tailor-made dresses for you and your bridesmaids, weddings are one of the biggest and most memorable milestones in our lives. While wedding planning can be exciting, we don’t always take into account the financial toll “the perfect wedding” can have on the pockets of you and your significant other, but never fear, by following these six tips you can be financially savvy on your big day and long after!

1. Have the money conversation!
Sit down and discuss your goals, values, interests, and relationships. This will help to determine how finances will be prioritized and the roles and responsibilities within the marriage. Be sure to continue going on money dates and speak openly about finances, post-nuptials. If you are in need of further financial consultation, there are professionals who specifically meet with couples to go over conversations to create financial expectations within the marriages.

2. Open a savings account, specifically for money for your wedding, and develop a budget!
Save, save and save some more! First, you need to determine how much you can afford to spend on your nuptials. If you need to have a long engagement to stick to your budget, do it and understand the costs associated with what you want.

3. Don’t accumulate debt from financing your own wedding and don’t tap into your retirement savings
With money already a stress on a relationship, overspending on your big day could lead to deeper debt that will not be beneficial to the health of your marriage. I would suggest saving for your wedding, rather than borrowing. This can help you avoid paying the interest associated with loans and credit card debt. If you do not have the cash to pay either a loan or credit cards, then avoid financing your wedding with these payment methods. If you borrow from your 401(k), you must repay the loan within five years or else you would have to pay taxes on the amount that was withdrawn as well as a 10% early withdrawal penalty.

4. Save for the big things in life and look for bargains when you can!
When furnishing your home or saving for a first deposit on a home – it will be important to save and find some good deals when you can. When planning for your wedding, there a million ways to find exactly what you have been dreaming of as a little girl. There are plenty of DIY crafts you can use for favors, bridal showers, and wedding décor. Pinterest will be your best friend!

5. Meet with a financial advisor
A financial planner will put a comprehensive plan in place to help prepare you for all financial matters that may arise in your marriage. If you or your significant other are concerned about how financing your wedding will affect your financial future, sitting down with a financial expert can help you plan for your special day and all of the special days to follow.

6. Combining finances and keeping some separate
If after your money conversation, you find that you may have different goals, consider having a “Yours,” “Mine,” and “Ours” account. Have an account for shared household expenses and keep your own accounts for personal expenses and discretionary spending, so you can buy those shoes and he can buy those tickets for the game.

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Stacy Francis, CFP®, CDFA

Stacy Francis is the Founder, CEO and President of Francis Financial, Inc., a Wealth Management and Financial Planning firm. With over 18 years of experience in the financial industry, she is a CERTIFIED FINANCIAL PLANNER™ (CFP®), a Certified Divorce Financial Analyst™ (CDFA™), and a Certified Estate Planning Specialist (CES™). She is the Co-Director of the Association of Divorce Financial Planners’ (ADFP) Greater New York Metro Chapter and a member of the Women Presidents’ Organization (WPO) and an honoree member of the Private Risk Management Association (PRMA). A nationally recognized financial expert, Stacy has appeared on ABC News, CNBC, CNN, PBS Nightly Business Report, The Today Show, Good Morning America, Fine Living Network, and The O’Reilly Factor. Stacy attended the New York University Center for Finance, Law and Taxation.

Mars and Venus - Women, Men and Money

by Stacy Francis, CFP®, CDFA

Mars may not be so far from Venus when it comes to money. According to a recent Redbook-SmartMoney Survey, most couples aren't wasting time arguing over finances and they have few clashes over cash.

One of the most revealing survey questions asked, “Is money a source of fights in your relationship?" Only 7 percent of respondents said that money is the biggest cause of conflicts, while 62 percent money is "rarely or never" the cause of a clash.

More evidence of financial harmony on the home front: Most men and women (58 and 68 percent, respectively) said that both spouses have an equal say in financial decision-making. And just because one person may earn more than the other, they don’t necessarily feel that they should have more say when it comes to spending the family’s money.

Couples do seem to be honest with each other when it comes to their financial fears. This is a new cultural shift that is revolutionizing the marriages of the 21st Century. With women, men and money – we really do seem to be getting somewhere.

Savvy Ladies’ Tip: What's the best way to keep such monetary disputes to a minimum? Know where your money's going. To cut down on conflicts about spending carefully track your purchases.

Uncover what's really behind those spats. Fights over your last manicure or his new tech gadget can sometimes be symptomatic of a bigger problem in a relationship. A good heart-to-heart can help reveal the real root of the fights.

Get your priorities straight. Taking the time to identify your financial goals is the first step towards a healthy financial relationship with your partner.

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Stacy Francis, CFP®, CDFA

Stacy Francis is the Founder, CEO and President of Francis Financial, Inc., a Wealth Management and Financial Planning firm. With over 18 years of experience in the financial industry, she is a CERTIFIED FINANCIAL PLANNER™ (CFP®), a Certified Divorce Financial Analyst™ (CDFA™), and a Certified Estate Planning Specialist (CES™). She is the Co-Director of the Association of Divorce Financial Planners’ (ADFP) Greater New York Metro Chapter and a member of the Women Presidents’ Organization (WPO) and an honoree member of the Private Risk Management Association (PRMA). A nationally recognized financial expert, Stacy has appeared on ABC News, CNBC, CNN, PBS Nightly Business Report, The Today Show, Good Morning America, Fine Living Network, and The O’Reilly Factor. Stacy attended the New York University Center for Finance, Law and Taxation.

Be Your Own Knight in Shining Armor

by Stacy Francis, CFP®, CDFA

Are you still looking for your knight in shining armor? Or have you already found him? Either way you have your work cut out for you when it comes to finances!

$ More than 50 percent of all marriages fail.

$ After a divorce, the average woman sees her standard of living drop by as much as 30 percent.

$ The average age of widowhood is 56 years old.

$ The average woman lives to 80. (The average man, to age 74.)

$ The poverty rate for elderly women is twice that of elderly men.

Savvy Ladies’ Tip: Read Prince Charming Isn't Coming: How Women Get Smart About Money by Barbara Stanny.

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Stacy Francis, CFP®, CDFA

Stacy Francis is the Founder, CEO and President of Francis Financial, Inc., a Wealth Management and Financial Planning firm. With over 18 years of experience in the financial industry, she is a CERTIFIED FINANCIAL PLANNER™ (CFP®), a Certified Divorce Financial Analyst™ (CDFA™), and a Certified Estate Planning Specialist (CES™). She is the Co-Director of the Association of Divorce Financial Planners’ (ADFP) Greater New York Metro Chapter and a member of the Women Presidents’ Organization (WPO) and an honoree member of the Private Risk Management Association (PRMA). A nationally recognized financial expert, Stacy has appeared on ABC News, CNBC, CNN, PBS Nightly Business Report, The Today Show, Good Morning America, Fine Living Network, and The O’Reilly Factor. Stacy attended the New York University Center for Finance, Law and Taxation.

Money Talk for Couples

by Susan Hirshman

Recently I was interviewed for a story in the New York Times that focused on “money talk” for couples.  I received so much great feedback on the story that I felt compelled to address it here.

The article opens up by saying…”One of the most difficult conversations a couple can have is not about love or commitment. It is about money — how it is saved and invested and what it means for their lifestyle.”

Do you agree?

I do.  Why?  I hear it practically every time I give a talk to women and open it up for Q&As.  The questions usually sound something like this:  How do I start a conversation with my husband about money?  How do I ask my partner to see our finances without having him feel like I don’t trust him?  How do we have a conversation without fighting?

Three words here…. communicate, communicate, communicate. Sounds simple, right?  But as we all know “communicate” is not always simple – especially when it comes to money. You’d be surprised (or perhaps you wouldn’t be) by how many people don’t know how much their spouse is making.  Generally, the problem is due to the highly emotional feelings (self worth, self esteem, power, control etc) and unresolved issues with money each partner brings to the table.

So sit back and have a think.  What does money mean to you?  How does your upbringing and past experiences affect your money attitudes?  What stops you from having these conversations – fear? interest? knowledge? lack of ownership? bigger relationship problems?

Having these initial conversations may not be easy but if you don’t have them you have a high chance of becoming part of the “if only” club.  You may not know what the “if only” club is, but I am sure you know someone (dare I say more than one) who is a member.  Do you have any friends, neighbors or family who were not involved in managing their finances only to find out in times of crisis that their husband was an overly aggressive investor, or he was loaned up to the hilt, or not saving for retirement, or not protecting the family from death or disability and so on and so on.  What do you think are the first words out of these women’s mouths?  Yep, you guessed it …if only I knew he was (fill in the blank), I would have (fill in the blank.) These scenarios break my heart, because they often result in unfortunate outcomes that could have been avoided or at least mitigated, if they were only talked about.

Therefore, the question I have for you today is this:  Will you be willing to bear some discomfort today to learn whether or not your future is on a path that will give you the greatest probability of success?   As the saying goes…”just do it”

Did Chelsea Have the Talk Before She Did the Walk?

by Susan Hirshman

Even if you were busy watching "Jersey Shore" or immersed in this season's must-have beach read, you know Chelsea Clinton got married this past July.  She married Mark Mezvinsky who has a successful Wall Street career.

We heard all about the dress, her makeup, the food and the guests, but we didn’t hear anything about one of the most important aspects of any wedding – Money.  Did they have the “talk” prior to getting married, is what I would like to know.  By “the talk,” I mean how is their wealth going to be handled?

Are they going to have what’s mine is mine and what's yours is yours? Or are they going to co-mingle their assets?  Or perhaps they'll find a place somewhere in the middle – a yours, mine and ours approach.

Which do you think is the right answer?  Well, that’s a trick question, because there is no right answer here.  The right answer is the one that best fits the relationship, family dynamics and financial situation.  In reality, this can be summed up in two words:  power and control.

How much control of your assets are you willing to give up?  None?  All?  Some? For example, if you put your money in a joint checking account you are giving up a lot of control.  Why? Because once you put assets in joint name you both have rights to it; meaning that your spouse can, without you being aware or being there, withdraw all of the money from the checking account and use it as he wishes.   So let's briefly look at the three aforementioned factors – relationship, family and financial situation and ask yourself how they affect your need for a degree of control.

First:  Relationship.  What has been your history?  Are you fighters or lovers?  Will you always be that way? I hate to be Debbie Downer, but we all know the statistics – 50% of marriages end in divorce.  So do you want all your money to be co-mingled or would you have a joint account along with your own private account?

Next:  Family dynamics.  Are there yours, mine and ours children?  Is he not your first husband (or are you not his first wife?).  If you co-mingle all your assets and there are separate families, it often causes great strife between one side and the other.  For example, if your children think that your new husband is spending their inheritance, it tends not to be a pretty picture.

Last, but not least is your financial situation.  Is one spouse wealthier than the other?  Does one spouse spend more than the other?  If you work, will you continue to do so after you get married and start having children?

The bottom line is this:  the only one who can decide what is right for you is….well you.  It’s your money and your future.

On the 12 Days of Christmas

by Susan Hirshman

As I was driving the other day, the song … On the twelve days of Christmas my true love gave to me….came on the radio.  It made me think – who really is our true love and what is it really that we want.

Who really is our true love?  Well, I am not Dr. Phil but we must first start with ourselves. And what is it that we really want? From a financial perspective most people tell me it’s “ peace of mind.”

So I took a little literary license and came up with a new song for the holidays.

On the 12 days of Christmas I gave to me the best gift of all…peace of mind….

Here are twelve things you should think about and examine

Day 1 – Review your life insurance coverage.  Is it working as projected?  Is the pricing up to date? Is the coverage in line with your needs?

Day 2 – Examine (or create) your retirement goals.  Are the assumptions realistic?  Is it a priority?  Are you on track?

Day 3 – Look at your emergency savings.  Do you have any? Is it liquid? What do you want it to cover?

Day 4 – Review your disability coverage.  Do you have any?  Do you know what your policy covers, for example is it your own occupation or any occupation?

Day 5 – Go thru your estate plan (or lack thereof.) Are the guardians you named for your children still the right choice?  Is the executor the right choice?  Has your life circumstances changed and those changes are not reflected in your will?

Day 6 – Appraise your need for long-term care insurance.  What is your family’s health and longevity history?  Do you have family members that would be willing and able to take care of you in the manner that you choose?

Day 7  - Assess your diet. Studies have found that discrimination based on weight in the work place is more prevalent for women than men, especially white women in professional occupations.

Day 8:  Study your portfolio performance.  Are you an emotional investor? Do you end up buying high and selling low?  How long do you usually hold on to a mutual fund?

Day 9: Take a break from TV.  Reduce your TV watching by less than 8 hours a year and you can gain financial success. Snookie won’t be able to help you but by taking a few hours to get financially educated (read Does this Make My Assets Look Fat? A woman’s guide to finding financial empowerment and success), then take around 5 hours to get organized and develop a plan, and then take an hour 2x a year to review your plan.

Day 10 – Re-evaluate your umbrella policy.  Do you have one?  Is it sufficient? When was the last time you revisited it? Experts report that only 10%of people have the proper umbrella policy.

Day 11: Make sure you are familiar with all your finances. Do you know what would happen to you financially if you were to get divorced? 25% of couples married for twenty years get divorced.  Furthermore, the “grey divorce” (people over 65) is the fasting growing group of people to get divorced

Day 12:  Go over your credit cards.  Understand your interest rates, payment options.  Make sure you are not paying more than you have to.

Financial Foreplay: Are You Doing It?

by Manisha Thakor

Time and again money is cited as one of the top causes for fights in relationships and divorce.  One way to prevent wallet wars is to engage in financial foreplay.   But first, some basics...

What is financial foreplay? The process of getting to know your sweetie's most intimate feelings about money.

Why is it so important? As one of my favorite personal finance bloggers, April Dykman, highlights in her piece "Do Savers Seek Out Spenders?" academic studies show we are hardwired to be attracted to our financial opposites.  There is quite literally something intoxicating about "financial otherness" in the early stages of a relationship... a feeling that can (and usually does) wear off after you walk down the isle. So as personal finance columnist Ron Lieber of The New York Times wisely points out, it's important to identify your financial differences before you commit to debt do you part.  In this spirit, here are 3 fun questions you can ask your honey about money.

1.    Fill in the blank with any word except EVIL: "Money is the root of all...." This simple question reveal a lot about how you each think about money.  Some people will say "opportunity or freedom" while others will say "fights or problems."  This is a playful way to initiate a talk about how money was (or wasn't) discussed when you were each growing up.

2.    Fill in the blank:  "Rich people are..."This is another super telling question.  Some people will say "hardworking, driven" while others will say "lucky or spoiled."  This question can help you broach your feelings about saving, spending, and financial goals.  Some people want to die with their spending perfectly timed to leave $0 in their pockets while others want to live off their interest and never touch their principal.

3.    Scenario analysis - today you get $20 million & a diagnosis of a rare disease that will leave you dead in exactly 10 years.  What will you QUIT & what will you START?The most common answers I hear are quit my job and start traveling.  This question is a great way to highlight your core priorities, and make sure they are complementary.  If you love your honey "only because" she is a neurosurgeon or he is an investment banker - but her/his dream is to be a yoga instructor... you may want to talk about that!

Have you ever experienced financial tension in a relationship?

[For more MoneyZen in your life, follow Manisha on Twitter at @ManishaThakor, on Facebook at /MThakor, or visit MoneyZen.com.]

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Manisha Thakor

From Manisha's linkedin profile page:

Manisha Thakor is the Director of Wealth Strategies for Women at Buckingham Strategic Wealth and The BAM Alliance. 

Manisha and her colleagues provide both evidence-based wealth advisory services for high-net-worth households and core asset management solutions for women and families nationwide with $80,000 or more in investible assets. 

An ardent financial literacy advocate for women, Manisha is the co-author of two critically acclaimed personal finance books: ON MY OWN TWO FEET: a modern girl’s guide to personal finance and GET FINANCIALLY NAKED: how to talk money with your honey. She is on Faculty at The Omega Institute and serves as a Financial Fellow at Wellesley College. Manisha is also a member of The Wall Street Journal’s Wealth Experts Panel, a member of the 2015 CNBC Financial Advisor’s Council, and wearing her financial educator’s hat serves as a part of TIAA-CREF’s Women’s Initiative. 

Manisha's financial advice has been featured in a wide range of national media outlets including CNN, PBS, NPR, The Today Show, Rachel Ray, The New York Times, The Boston Globe, The LA Times, Real Simple, Women’s Day, Glamour, Essence, and MORE magazine.

Prior to joining the Buckingham team, Manisha spent over twenty years working in financial services. On the institutional side she worked as an analyst, portfolio manager and client relations executive at SG Warburg, Atalanta/Sosnoff Capital, Fayez Sarofim & Co., and Sands Capital Management. After this she moved to the retail side and ran her own independent registered investment advisory firm, MoneyZen Wealth Management. 

Manisha earned her MBA from Harvard Business School in 1997, her BA from Wellesley College in 1992 and is a CFA charterholder. She lives in Portland, OR where she delights in the amazing Third Wave coffee scene and stunning natural beauty of the Pacific NorthWest. Manisha’s website is MoneyZen.com.

The New Triangle Drama: Remarriage, Kids, and Inheritance

by Stacy Francis, CFP®, CDFA

It is rare that anyone cries in my office, but it did happen last week. A client reported between sobs that her dad had passed on a while back. Not only was she paralyzed with grief; she had also just learned that she wouldn’t get a dime out of his estate. It was all going to the twenty-years-younger woman he married three years ago. It felt, in her words, like a slap in the face. 

A sad story indeed, and more common than I think anyone would like. With an increasing number of people remarrying late in life, conflicts with children are on the rise – not just on a personal level, but financially, too. Unfortunately (and perhaps surprisingly), kids have very few rights in these scenarios. While it takes very little for a parent to disinherit a child, most states require that a surviving spouse receive between a third and half of the estate, at least (referred to as the elective share).

Sure, my client could make a court case out of it. Children often gain the jury’s sympathy in inheritance disputes. Unfortunately, the law is on the surviving spouse’s side.

The good news is: if you plan ahead, you can nip this ugly scenario in the bud and ensure that bereavement is the only reason your children cry at your funeral. Below are just a few ideas: 

  1. Skip the wedding altogether. Many couples who meet late in life opt to just live together, keeping assets separate and making life a lot easier for their respective children.

  2. Draft a detailed prenup. It may not be the most romantic thing to do, but it can make all the difference later on.

  3. Set up a Q-Tip trust. Q-Tip trusts are designed for this very purpose. When the parent passes on, the surviving spouse receives the income from the trust while the children hold on to the principal. Once the surviving spouse kicks the bucket, everything in the trust is paid out to the children. While Q-Tip trusts have their advantages, they can also create a lot of conflict- especially if the surviving spouse is young with a long life expectancy. Furthermore, setup costs can be substantial.

Comment

Stacy Francis, CFP®, CDFA

Stacy Francis is the Founder, CEO and President of Francis Financial, Inc., a Wealth Management and Financial Planning firm. With over 18 years of experience in the financial industry, she is a CERTIFIED FINANCIAL PLANNER™ (CFP®), a Certified Divorce Financial Analyst™ (CDFA™), and a Certified Estate Planning Specialist (CES™). She is the Co-Director of the Association of Divorce Financial Planners’ (ADFP) Greater New York Metro Chapter and a member of the Women Presidents’ Organization (WPO) and an honoree member of the Private Risk Management Association (PRMA). A nationally recognized financial expert, Stacy has appeared on ABC News, CNBC, CNN, PBS Nightly Business Report, The Today Show, Good Morning America, Fine Living Network, and The O’Reilly Factor. Stacy attended the New York University Center for Finance, Law and Taxation.

The New Triangle Drama: Remarriage, Kids, and Inheritance

by Stacy Francis, CFP®, CDFA

It is rare that anyone cries in my office, but it did happen last week. A client reported between sobs that her dad had passed on a while back. Not only was she paralyzed with grief; she had also just learned that she wouldn’t get a dime out of his estate. It was all going to the twenty-years-younger woman he married three years ago. It felt, in her words, like a slap in the face.

A sad story indeed, and more common than I think anyone would like. With an increasing number of people remarrying late in life, conflicts with children are on the rise – not just on a personal level, but financially, too. Unfortunately (and perhaps surprisingly), kids have very few rights in these scenarios. While it takes very little for a parent to disinherit a child, most states require that a surviving spouse receive between a third and half of the estate, at least (referred to as the elective share).

Sure, my client could make a court case out of it. Children often gain the jury’s sympathy in inheritance disputes. Unfortunately, the law is on the surviving spouse’s side.

The good news is: if you plan ahead, you can nip this ugly scenario in the bud and ensure that bereavement is the only reason your children cry at your funeral. Below are just a few ideas:

  1. Skip the wedding altogether. Many couples who meet late in life opt to just live together, keeping assets separate and making life a lot easier for their respective children.
  2. Draft a detailed prenup. It may not be the most romantic thing to do, but it can make all the difference later on.
  3. Set up a Q-Tip trust. Q-Tip trusts are designed for this very purpose. When the parent passes on, the surviving spouse receives the income from the trust while the children hold on to the principal. Once the surviving spouse kicks the bucket, everything in the trust is paid out to the children. While Q-Tip trusts have their advantages, they can also create a lot of conflict- especially if the surviving spouse is young with a long life expectancy. Furthermore, setup costs can be substantial.
Comment

Stacy Francis, CFP®, CDFA

Stacy Francis is the Founder, CEO and President of Francis Financial, Inc., a Wealth Management and Financial Planning firm. With over 18 years of experience in the financial industry, she is a CERTIFIED FINANCIAL PLANNER™ (CFP®), a Certified Divorce Financial Analyst™ (CDFA™), and a Certified Estate Planning Specialist (CES™). She is the Co-Director of the Association of Divorce Financial Planners’ (ADFP) Greater New York Metro Chapter and a member of the Women Presidents’ Organization (WPO) and an honoree member of the Private Risk Management Association (PRMA). A nationally recognized financial expert, Stacy has appeared on ABC News, CNBC, CNN, PBS Nightly Business Report, The Today Show, Good Morning America, Fine Living Network, and The O’Reilly Factor. Stacy attended the New York University Center for Finance, Law and Taxation.

Spousal IRA 101

by Stacy Francis, CFP®, CDFA

A woman approached me after maternity yoga last night. My husband is stoked about this child, she told me, and when my maternity leave is up, he would like to be a stay-at-home dad for a couple of years. I already know this means he won’t be able to keep contributing toward his 401(k), but is there another way for him to keep up his retirement savings? 

A smart question, and she should really give herself a pat on the shoulder for planning ahead. And yes, provided that she makes enough money and that they file a joint tax return, he can contribute toward a traditional or Roth IRA (income limits apply for Roth IRAs). Even if her employer does provide a retirement plan, she may also be able to contribute toward a traditional IRA (or a Roth, as long as her income is below certain limits).  

Putting her and her husband’s case into numbers, they are each eligible to contribute $5,000 toward a traditional IRA in 2009 ($6,000 if they are over 50), as long as she makes enough money to cover the contributions. If they prefer Roth IRAs, their joint adjusted gross income must be less than $176,000 (phase-out between $166,000 and $176,000).

Clear as mud, isn’t it?

Comment

Stacy Francis, CFP®, CDFA

Stacy Francis is the Founder, CEO and President of Francis Financial, Inc., a Wealth Management and Financial Planning firm. With over 18 years of experience in the financial industry, she is a CERTIFIED FINANCIAL PLANNER™ (CFP®), a Certified Divorce Financial Analyst™ (CDFA™), and a Certified Estate Planning Specialist (CES™). She is the Co-Director of the Association of Divorce Financial Planners’ (ADFP) Greater New York Metro Chapter and a member of the Women Presidents’ Organization (WPO) and an honoree member of the Private Risk Management Association (PRMA). A nationally recognized financial expert, Stacy has appeared on ABC News, CNBC, CNN, PBS Nightly Business Report, The Today Show, Good Morning America, Fine Living Network, and The O’Reilly Factor. Stacy attended the New York University Center for Finance, Law and Taxation.