When an Aging Loved One Experiences the Unexpected, Where Can Families Turn for Help?

During her daily morning walk, Anna’s 75-year-old mom tripped and fell, breaking her hip. Treatment would require surgery and inpatient rehab, followed by weeks of physical therapy. Her mom lived alone, and Anna and her sister had jobs and families of their own. Her mom was adamant that she could continue living in her home, but with limited mobility, could she? Should they hire help for her? If she couldn’t live alone at home, where would she go?

Anna and her sister had a mountain of decisions to make with no way of knowing whether they were making the right ones. This weighed on Anna, her sister, and especially her mom, a once independent person who was not accustomed to relying on her children.

Scenarios like this can catch many families off-guard, and they must quickly make decisions that can have a lasting impact on the aging loved one and their family. Where can families turn for help? Fortunately, a knowledgeable guide is available.

First, What’s an Aging Life Care Manager

An aging life care manager (ALCM), also known as an elder-care manager or geriatric-care manager, is a designated professional who helps families make healthcare decisions–even during crises–and can assist with ongoing care management. They’re not caregivers, but they assess a loved one’s condition, anticipate future needs, and help with planning and decisions regarding care, housing, transportation, etc. These conversations can be difficult for families, particularly when emotions are running high and disagreements aren’t uncommon. Aging-life-care-managers also serve as mediators and help calm family tensions.

ALCMs often have a background in nursing, psychology, sociology, or gerontology and are care-manager certified. They understand the intricacies of healthcare and insurance systems, advocate for quality care, and search for cost-effective resources.

ALCMs also have in-depth knowledge about:

  • State and local regulations that impact care and services
  • Services provided—and services that aren’t provided—by local retirement communities and care facilities Eligibility guidelines for government programs and federal and state entitlements
  • Insurance claims and filing appeals
  • Relationships with relevant professionals such as estate planning and elder-law attorneys

Many people have never heard of ALCMs, despite the significant benefits they provide. Let’s look at what some of those are.

Second, Four Key Benefits of Using an Aging Life Care Manager

  1. Peace of mind about important decisions: After a fall, you might not know if it’s safe for your loved one to live alone at home. But what are the options? ALCMs can help families make decisions about whether an aging loved one can continue aging in their home or not. ALCMs have inside knowledge about local facilities, e.g., long-term care facilities, assisted-living communities, or senior-living communities. They know how well-staffed they are, how responsive caregivers are to residents’ needs, and have developed relationships with managers and directors. This better equips ALCMs to help families determine the safest and most affordable living options.
  1. Ease a loved one’s fears about being a burden: When an aging person faces a health crisis, they often fear losing control or being a burden to their family. According to one ALCM, Audrey Zabin, “an ALCM can help the aging loved one maintain as much independence and control over their lives as possible.” The family members are kept in the loop, but the client has someone outside of the family to talk to about sensitive topics and to help guide them with decisions.
  1. Helps prevent families from taking on too much: Caring for a loved one may be noble and rewarding, but family caregivers often underestimate all that it entails. Caregivers can feel overwhelmed as they try to meet all their loved ones’ needs, look after their own families, themselves, and, in many cases, perform at work. An aging life care manager can help provide families a realistic evaluation of the caregiving needs so they can determine what they’re capable of managing or if they should consider hiring help.
  1. Cost savings: ALCMs can help you make practical and informed caregiving and housing choices first, so you don’t have to fix them later, which typically costs more time and money. For example, after a fall you may decide it’s best to move your loved one into an assisted-living facility. You find one close by, sign the admission agreement and move your loved one in, only to realize three months later that your loved one is unhappy and the care is poor. Zabin says, “In that situation, an ALCM may have realized that the facility you chose wouldn’t be a good fit and could have helped you avoid this costly, both financially and emotionally, disaster.”

Third, How to Find and Hire an ALCM

The Aging Life Care Association (aginglifecare.org) allows you to search for aging life care managers by zip code and check their education and certifications. Some questions to ask when interviewing an ALCM are:

  • Do you have a comprehensive list of services and fees?
  • What credentials or licenses do you have?
  • How long have you been in this industry?
  • How will you communicate with me and my family?
  • Can I call you in an emergency or after hours?
  • Would you provide three references?

ALCMs typically aren’t covered by insurance, so you want to have an idea of what they could cost. Generally, an initial assessment can cost between $800-$2,000, with ongoing hourly rates ranging from $50-$200 per hour1. These amounts can vary depending on where you live.

While the initial assessment may seem like a large expense, it’s thorough and extensive. The ALCM will review an aging loved one’s medical history, medications (including purpose and dosage), evaluate the client’s physical and cognitive health, assess their home’s safety, and review all medical professionals involved and their specific roles. Then, they’ll develop a care plan, usually 3-5 pages, providing options and recommendations for optimizing your loved one’s care. The assessment might be sufficient, or you might want an ongoing partnership with the ALCM to help manage caregiving.

“Aren’t There Free Services Like This Available?”

Some organizations offer free guidance, but families should consider them carefully. Many are paid through referral fees when they place clients at participating network-care facilities or use network home-care providers. This arrangement could lead to biased guidance about housing or caregiving decisions.

Aging life care managers are impartial. They don’t receive any compensation from doctors, care facilities, or care providers. Their priority is the safety and well-being of your loved one.

Remember Three Things About Aging Life Care Managers

First, life care managers are a valuable and impartial resource whose goal is to help you and your loved one through aging or a crisis. Second, they can help you make informed and cost-effective decisions about the care and health of your loved one during a specific health challenge or for ongoing caregiving needs. Third, aging life care managers and their service offerings are easy to find online.

The Gift of Time Is Priceless

Without an ALCM, families may need to make caregiving decisions or provide care for an aging loved one themselves. The amount of detail and time required can be overwhelming, and it can affect a family’s relationship with their aging loved one.

Zabin says, “The most important service I provide is helping families have quality time together.” Without an ALCM, families can become consumed with conversations and obligations related to a loved one’s care. This often leaves little time to simply be a family, and relationships can become strained. With ALCMs help, families can have some assurance that a caregiving plan is in place, focusing on being present and enjoying each other’s company.


1 Geriatric Care Managers Advocate for Older Adults — and Their Caregivers, AARP, 10/2022

Social Security Spousal Benefits Explained

August 25, 2022 By Mary Beth Franklin

It seems like a good time to review the who, what, when and how much of Social Security spousal benefits, and the different rules — and benefit amounts — for spouses versus survivors.

I’ve received numerous questions from InvestmentNews readers about Social Security spousal benefits. There also seems to be a lot of confusion regarding the difference between spousal benefits, when one’s mate is alive, and survivor benefits after one’s spouse dies.

So it seems like a good time to review the who, what, when and how much of Social Security spousal benefits and the different rules — and benefit amounts — for spouses versus survivors.

A spouse who hasn’t worked long enough — at least 10 years — to qualify for his or her own retirement benefit may still be eligible for spousal benefits. A spousal benefit is worth up to 50% of the working spouse’s full retirement age benefit amount. To collect spousal benefits, the couple must be married at least one year, and the working spouse must claim Social Security retirement benefits to trigger spousal benefits for the other spouse. Different rules apply to divorced spouses.

Today, many spouses are entitled to their own retirement benefit. In addition, they may be eligible for a spousal benefit. Traditionally, if an individual’s benefit as a spouse is higher, they will get an additional amount so that the combination of benefits equals that higher amount.

People who were born before 1954 may be eligible to claim a spousal benefit first and switch to their own maximum retirement benefit at 70. The last eligible group of people who can use this switch strategy turn 70 in 2023. All others who were born in 1954 or later don’t get a choice. Whenever they file for Social Security, they will be paid the highest benefit to which they are entitled at that age, whether on their own earnings record or as a spouse.

One adviser, Charlie, asked about an optimum Social Security claiming strategy for his clients Linda and Rick.

Linda reaches her full retirement age next month and is eligible for a $1,100 monthly benefit. Her higher-earning husband, Rick, reaches his full retirement age six months later in March, when he will be eligible for $3,300 monthly benefit.

Charlie asked: Can Linda start drawing her $1,100 benefit next month and then switch to the higher spousal benefit of $1,650 — half of Rick’s full retirement age benefit of $3,300 — next March?

Yes, I responded. If Linda claims Social Security at her full retirement age, she will automatically step up to a higher spousal benefit amount once her husband claims his Social Security.

Another adviser, Kyle, asked what happens if a wife who’s not eligible for her own retirement benefit collects reduced spousal benefits early. Does an early claiming decision lock in that reduced amount for the rest of her life? And what happens if her husband dies first? Does her spousal benefit stay the same because she claimed early?

If the wife isn’t eligible for her own Social Security retirement benefit, she would be entitled to a spousal benefit once her husband claims his Social Security, I responded. But if she claims her spousal benefit before her full retirement age, it would be worth less than half of her husband’s full retirement age benefit amount. The earliest age she can claim spousal benefits is 62, and the amount is permanently reduced.

But if the husband dies first, she would no longer be a spouse. She would be a survivor. Even though her spousal benefits are permanently reduced if she claims before her full retirement age, her early claiming decision will have no impact on her survivor benefits if she is at least full retirement age when she collects them.

Survivor benefits are worth 100% of what her late husband was collecting when he died, or what he would have been entitled to at the time of his death if he died before claiming benefits. That assumes his wife is at least full retirement age when she collects her widow’s benefit.

Survivor benefits are available as early as age 60, compared to 62 for retirement benefits, but the amount is reduced to as little as 71.5% of the late worker’s benefit amount if the survivor claims before full retirement age. Once the widow steps up to the larger survivor benefit, her smaller spousal benefit would disappear.

There are a few other important points about survivor benefits. If a wife is collecting spousal benefits on her husband’s record and he dies first, she will automatically step up to the larger survivor benefit — even if she is not yet full retirement age — meaning she would be forced to accept a smaller benefit.

But if a spouse is collecting her own retirement benefit when her husband dies, she can choose when to start her survivor benefit. A survivor benefit is worth the maximum amount if collected at the survivor’s full retirement age. Unlike retirement benefits, survivor benefits do not continue to grow by 8% per year if postponed beyond full retirement age up until age 70.

Finally, if a spouse is entitled to his or her own retirement benefit and hasn’t yet claimed Social Security when a mate dies, he or she can choose which benefit to claim first and switch to the other larger benefit later.

How to Start Preparing for the Transition Into Retirement

A financial professional can help you evaluate your retirement goals, timeline, and more.

Questions this article can help you answer:

  • What do I need to know about the emotional factors of retirement?
  • What do I need to think about if I want to retire early or later?
  • How can my financial professional help me determine if I’m ready for retirement?

For some people, retirement used to mean receiving a gold watch at age 65, but today things are different. Your plans for retirement – from setting your goals to determining your timeline – can be the ultimate reflection of what you want to achieve and what’s most important to you in this next phase of your life.

Creating a plan to get you to and through retirement is essential in helping you feel confident that you can live the retirement lifestyle you want. There are also three other important items to consider: understanding cultural and social influences on your financial goals, preparing for the emotions associated with the transition to retirement, and determining your preferred retirement timeline. Talk to your financial professional to learn how they can help you optimize your plan based on how these important factors can impact your transition into retirement.

1. Revisit Your Retirement Goals

When you started planning your retirement, you likely had certain goals in mind and an idea of what your retirement would look like. Do those goals and ideas still reflect what you want right now? A survey found that one-quarter of people with $250,000+ in investable assets had changed their plan for retirement six times or more. Common reasons that may have you rethinking retirement goals include the progression of your career, family events, and changing market conditions.

Common Factors That Cause People to Change Their Plans for Retirement

  • Career Events
  • Family Changes
  • Health
  • Desire to retire earlier or later
  • Changes in the market

The Impact of Family and Friends on Goals

It’s worth considering what circumstances initially shaped your goals. One study showed that 35% of people currently employed had sought advice on retirement planning from family and friends. While that can be a safe place to seek opinions, it’s important to remember that their retirement ideas or experiences were shaped by their personal goals and financial situations. Your ideal retirement may match theirs in some ways, but it’s also unique to you, and you may need to take a different approach.

How Your Financial Professional Can Help You

Your financial professional understands that plans for retirement can change and may need to be adjusted. You can use an annual check-in with your financial professional to discuss any new goals you may have or how your life or priorities have changed. Your financial professional can also provide you with another perspective on how your situation may be different from those of your friends and family who might have influenced your plans for retirement. For example, perhaps you’re in a better financial position than your parents were, so you may be able to travel more than you were anticipating. Your financial professional can walk you through how those adjustments may impact your plans and discuss strategies you may want to consider to help you achieve your updated goals.

2. Prepare Emotionally for Retirement

When people think of retirement planning, the financial component is often one of the first things they think about. However, there’s also a significant emotional element to the transition into retirement. For those who find their work fulfilling and whose social networks are connected to their employment, retirement can lead to anxiety, stress, and depression.

Some couples experience additional challenges related to the emotional aspect of the transition into retirement. For couples who retire at the same time, there’s typically an immediate increase in the amount of time spent together. You may decide to find a mix of shared interests and individual hobbies that gives both of you time to spend together and time to enjoy on your own. For couples who have a staggered retirement, it can still change the dynamic at home. You may want to consider a new approach to chores around the house, especially if the person still working typically did most of the chores before. Preparing for these changes in your home life may help you take advantage of the new opportunities that the transition to retirement offers.

How Your Financial Professional Can Help You

One of the reasons people often find the transition to retirement difficult is they have a vision of what retirement is going to be like, but it’s not necessarily a day-to-day vision. Retirement may give you the opportunity to travel more or allow you to catch up on some home improvements you’ve been planning to make, but what does retirement look like when you’re not traveling or when the project is complete?

If your finances, job, and other responsibilities will allow it, your financial professional may suggest that you take a test-drive of retirement. Taking a month or so for a mini-retirement may help you determine if retirement is what you expected and how you might spend your days. Then, talk to your financial professional about how it went. If you find that you’re already itching for more activity than the mini-retirement provided, you may need to work with your financial professional to re-evaluate how long you want to stay in the workforce full time, whether you want to transition into a part-time retirement where you still work some, or if there are other aspects of your plan you’d like to adjust. A mini-retirement can also give you a good sense of how much money you might spend in an average month as a retiree, which can help you and your financial professional modify your plans, if necessary, to provide for more retirement income.

3. Determine Your Retirement Timeline

Once you’ve determined that your goals are aligned with your desires and you’ve considered whether you may be emotionally ready for retirement, it’s time to assess when you want to retire. This is a decision that is driven by several financial and emotional factors. Keep in mind that your preferred retirement timeline might change. Nearly half of retirees said they retired earlier than they expected, most often because they were financially ready to or they were forced to due to health concerns or changes in their employment.

Early Retirement Considerations

About 70% percent of people in their 40s and 67% of those in their 50s said they would retire immediately if they had the financial ability to. The Financial Independence Retire Early (FIRE) movement has many people considering saving aggressively and curbing spending in order to try to retire as early as possible. But there are more considerations than just how much you’ve saved, including:

  • Health care: Early retirees should think about the cost of health insurance if they will no longer be covered by an employer-sponsored plan since Medicare coverage generally doesn’t begin until age 65. Medicare is also individual insurance, so even if you qualify, your spouse may not. If your spouse is still working, you may be able to join their health plan. Other options may include COBRA, which can extend your employment benefits by 18 months or more after you leave the workplace; private insurance; or an individual or family plan on the public marketplace. These options can be expensive. On average, employers pay about 80% of health insurance premiums for their workers, so one way to estimate what you might pay per month is to multiply your current premium by five.
  • Social Security benefits: The fewer years you work, the less you contribute toward Social Security and the lower your benefits may be. Nearly 90% of people rely on Social Security as part of their retirement income. You may need to consider other sources of guaranteed lifetime income, such as an annuity, to supplement Social Security and provide you with protection against market volatility during your retirement.

Late Retirement Considerations

People who feel they may not be financially ready for retirement, or who enjoy their work and have no desire to stop working, may be more interested in a later retirement. Retiring later can have some advantages. If you wait to begin claiming Social Security benefits, your monthly benefit when you do start claiming may be higher. For example, someone born in 1960 or later would typically receive 100% of their monthly retirement benefit if they retire at age 67. If they delay retirement until age 69, they would receive 116% of the original monthly benefit. By waiting until age 70 or later, they would receive 124% of the original monthly benefit. People who work longer may also continue to be covered by their employer’s health care plan until they qualify for Medicare.

Delaying Claiming Your Social Security Benefits May Result in Higher Monthly Income

Those who want to work longer may need to consider the emotional side, however. If your friends and co-workers retire earlier than you do, will you miss the social interaction with them in the office and feel like you’re missing out on the experiences they’re having in retirement?

How Your Financial Professional Can Help You

As you work to determine your retirement timeline, your financial professional can show you how different scenarios, such as retiring a year or two earlier or later, may impact your retirement savings and income. They could also show you how a slower transition into retirement, such as moving from full-time to part-time work or leaving the full-time workforce to serve as a consultant or contractor, could impact your plans.

How Your Financial Professional Can Serve as a Trusted Resource

Your financial professional can serve as your trusted resource during all phases of your retirement planning, helping you manage both the financial and the emotional considerations associated with retirement so that you can feel more confident in pursuing your goals and ambitions. Talking to your financial professional about these three important topics will allow you to work together to customize your retirement timeline and approach to retirement in a way that can help you feel more prepared.

1 Road to Retirement Survey. TD Ameritrade, January 2020.

2 2021 Retirement Confidence Survey. Employee Benefit Research Institute, 2021.

3 Adjusting to Retirement: Handling the Stress and Anxiety. HelpGuide, November 2021.

4 The FIRE Movement Is Alive and Well. Kiplinger, February 24, 2022.

5 Leaving your job? 5 questions you should ask about COBRA benefits. Aetna, as of May 2022.

6 2020 Retirement Confidence Survey Summary Report. Employee Benefit Research Institute, April 23, 2020.

7 Retirement Benefits: If you were born in 1960 your full retirement age is 67. Social Security Administration, as of May 2022.

Brighthouse Financial, Inc. is not affiliated with nor endorses any businesses or organizations that appear in this material. This information is for educational purposes only and brought to you courtesy of Brighthouse Financial, Inc.

How to Manage Money as a Committed Couple

by Michael Reynolds, CFP®, CSRIC®, AIF®, CFT-I™

Whether you’re a new couple just beginning to merge your lives or a couple that has been together for a decade or two, money management can be a tough topic to handle. For the context of our purposes, a “committed couple” is a married or committed couple that is in a long-term, lifetime relationship.

Money arguments are the 3rd most common disagreements that can lead to couples splitting, but when couples make intentional decisions about their money management, those arguments can be mostly avoided.

Elevation Financial is a judgment free zone. While there are many “experts” out there that will tell you their opinion about how to manage money as a couple, there’s really no right or wrong to it. Your job, as a couple, is to figure out the best way of doing things for your relationship. What’s right is what’s right for you in your particular relationship. In your partnership, your marriage, your relationship, that’s what’s right for you. What makes sense for both of you, what you’ve agreed on, what you’ve intentionally decided to do, if it’s healthy and if it’s working.

There are three main methods we will discuss.

  • 100% separation
  • 100% combined
  • And a hybrid model also called the “yours, mine, and ours” method

In every scenario, you’ll need to be financially naked with your partner. Every method has its pros and cons, but each will only work if you are 100% transparent. You’ll need to be honest about your current debt, future goals, and what your relationship with money is.

Every person comes with their own money story. It’s important to mention that you can’t project your own money story onto your partner. Your relationship with money is your own but it’s important to also make space for your partner’s money story as well.

Method 1: 100% Separation

This method may be a good choice for you if:

  • Both partners are very committed to their careers.
  • You may have had a previous relationship that has led to more caution.
  • You prefer being 100% financially independent.
  • You may have grown children from a previous relationship and want to protect your legacy for your children.
  • Your spending and money management habits are very different from your partner’s.
  • One partner has a complex financial situation or outstanding debts.

In this situation, all of your liquid and investment accounts are completely separate and couples share expenses similar to being roommates but the split may not be 50/50. As a couple you need to decide what expenses will be shared and how those expenses will be divided. It could be 50/50, or you could decide that it’s more equitable to split expenses based on a percentage of your incomes.

Other factors that could help determine the split include what percentage of income each partner brings to the household, if a partner has children living in the home from a previous relationship, and who in the partnership does more unpaid labor for the household.

Upsides for this type of method include complete autonomy over finances as individuals. Maintaining your autonomy could reduce friction between you and your partner about money. You won’t have to worry about explaining why you love to spend your money on expensive meals out, while your partner may prefer saving money and cooking at home.

This method doesn’t come without complications though. It may be challenging to determine how to equitably divide expenses. You’ll also need to play out possible scenarios, like how to handle one partner financially assisting the other if a situation arises that one partner can’t handle on their own. Will it be a loan? Will there be interest involved? Or will the assistance simply be a gift? These scenarios may become even more important to plan for as you get older and into retirement.

Open communication is paramount to making this situation work. You don’t want to ambush your partner by being in default on debts. Hiding your financial situation can lead to resentment and distrust. You’ll also need to clearly communicate what your financial goals are and how you’ll reach them together. If you are saving for a down payment on a house, how will you stay on track as a couple?

Method 2: 100% Combined

In this situation, all of your income, assets, and expenses are combined. Once money flows in, it’s considered “household” money.

This method may be a good choice if you:

  • Need flexibility for one partner to go back to school, start a business, or take a career risk.
  • If partners plan to take parental leave in the future.
  • You have similar spending habits and attitudes around money or can easily compromise on money habits and behaviors.
  • You and your partner feel “in sync” about life and money to the extent that there is a high level of trust.

This option can often feel simpler than keeping things separate. There’s no discussion about how expenses are divided when you go out to dinner or take a family vacation.

This option can also lead to a more unified “team” approach for the future goals. There’s also research to back that couples who combine their assets are more satisfied with their relationship.

This team approach often leads to faster progress towards financial goals such as saving for a down payment or retirement savings.

Combining finances 100% can lead to money arguments if partners are not on the same page about planning. For example, what if one partner wants to pay down a mortgage faster while the other wants to put the extra money into savings or investments? It can also lead to resentments if partners handle money differently and aren’t able to compromise. Partners can also sometimes feel a bit of resentment with the lack of financial independence.

Some helpful practices to make combining resources successful you’ll need to budget, budget, budget. There are many budgeting tools that can help, but even a simple spreadsheet can work. You’ll need to openly communicate about money and to set aside the “what I want” mentality and think in terms of “what is best for our household”.

Both partners will also need equal access to the accounts and budgeting tools. Don’t fall into the trap of one partner handling the finances while the other isn’t aware of what is going on. It may also be helpful for there to be a threshold of spending that a partner can make unilaterally and purchases above that threshold need to be discussed and agreed upon by both parties.

With open communication and practice, this method can work really well for both parties.

Method 3: Hybrid or “Yours, Mine, and Ours”

In this scenario, each partner has individual accounts and there is at least one joint account for household and joint expenses.

This system can work well for couples that:

  • Want to share expenses but maintain some autonomy.
  • See the value in working towards common goals as a team.
  • Reach financial goals without your partner’s influence.

As a couple you’ll want to decide what expenses are shared that need to be covered. Mortgage/rent, utilities, groceries, insurance, home improvements, and joint kids stuff among other things can make up this list. Will lunch or saving for a new car be included?

You’ll also want to decide how money flows in and out of the household account. Will all income go to the joining account and then be distributed out to individual accounts or will your income go to individual accounts and then flow into the joint account in agreed-upon amounts? What is the method of funding? Will it be a 50/50 split or a percentage of income?

You’ll also want to address how an emergency fund or short-term savings fit into your system. Will savings be joint or live with each individual? Or maybe you’ll have a combination of both. Again, there’s no right answer where. It’s what works best for your relationship and your household.

A hybrid system can provide each partner with a level of financial independence. If independence is valued by you, this is a great option. You can purchase gifts for your partner without them seeing exactly where you shopped and what you spent. If you have drastically different financial habits this system can also reduce arguments over money.

Just like the 100% separate system, handling your finances this way can also be more complicated, like deciding what percentage each partner contributes to the joint account. It’s easy for money to be an emotional topic and you don’t want to diminish the value of a partner by tying it to their salary. You’ll want to openly discuss your individual spending habits and agree on what’s acceptable in your relationship. You also have to discuss how financial assistance will work between individuals. You’ll want to discuss what would happen in the event one party loses their job.

Just like the other systems you’ll need to talk openly about money to avoid financial pitfalls and budget your joint account even if you don’t want to have a strict budget in your individual account.

It’s a Spectrum

You can have small individual accounts for “fun money”. Or you can do the exact opposite and have a small joint account for just a few household expenses. You get to decide what works best for you and your relationship.

These methods are examples of how to handle your “right now” financial situation.

While it’s important to handle the present, it’s also a great segue to also think through “future finances”.

How will you handle keeping your finances separate and one partner has saved adequately for retirement but the other hasn’t. Will that person be on their own? Does their partner help them? Will finances be managed differently in retirement? Will the partner that was able to save feel resentment over helping the other party?

Your system can also change over time as your financial situation changes or your goals change through the different seasons of your life. You may start with completely separate finances until one partner cleans up their messy financial situation. You can later decide on a combined or hybrid method because you want to purchase a home.

Making Sure the Method is Healthy

Money conversations can be hard. It’s important that both partners feel heard during your conversations. Does each person feel like the decisions were fair? Do they match your values as a family? Does each person understand where the money comes from, where it is, and what you’ve decided its purpose is going to be?

Side note: while financially “healthy” may not look the same for every couple, it’s important to be mindful of understanding and avoiding financial abuse. When one partner starts controlling the other’s “ability to acquire, use and maintain money” that is financial abuse.

Signs of financial abuse by a partner include:

  • Inappropriate control over money or creating a budget without your input.
  • Making you account for every penny you spend.
  • Limiting your access to financial resources.
  • Feeling entitled to your money or savings.
  • Spending your money or savings without your permission.
  • Threatening to cut you off financially if you disagree with them.
  • Maxing out credit cards or creating debt in your name.

To find out more information or if you believe you are in a financially abusive relationship, call the National Domestic Violence Hotline at 1-800-799-7233.

Communication is Key

Talking about finances can be emotional. It’s important to create a space that is judgment-free so you can discuss your situation without shame or fear. Transparent communication also strengthens your relationship and can avoid financial infidelity by one partner.

Create money rules for your relationship. This will help you get on the same page about your current situation, future goals, and how you’ll deal with the “what-ifs” that may happen. This is also a great way to define what is frivolous and what is considered a necessity as well as lay out what tools you will use together.

The conversation isn’t “one and done”. You won’t be able to create a financial plan for your life together in one session. You’ll need to continue the conversation and have regular check-ins with each other so you can both remain on the same page. It may be helpful to set designated times for money conversations at regular intervals. This gives each of you adequate time to be mentally prepared.

Communication will also give you the opportunity to evaluate and do better as time goes on. With healthy communication, you’ll be able to come up with a system that works for your relationship.

Working with a financial planner can help you wade through the questions that need to be answered to come up with the method that will work best for you. If you feel like you need a little extra help, don’t be afraid to seek out professional assistance.

Having a plan and a foundation of strong communication about money is one of the best ways to help nurture a happy and fulfilling relationship.

9 Tips to Ease the Sting of Back-to-School Budgeting

by Veronica Matthews, Nicole Dow

Back-to-school season comes around every year, but like the holidays, it has a tendency to sneak up on parents — and their bank accounts. With inflation and up-and-down gas prices, back-to-school is shaping up to be an even bigger budget challenge this year.

The National Retail Federation estimated last year that parents would spend a record average of $864 for back-to-school shopping for children in elementary, middle or high school and about $1,199 shopping for college-aged kids. That’s a lot of money for pencils and glue (and MacBooks).

If you don’t want to get caught off guard with hundreds of dollars in expenses, you’ll need to plan ahead and be a smart shopper. Here are nine strategies for reining in your back-to-school budget.

9 Tips to Keep Your Back-to-School Budget on Track

  • Assess what is needed
  • Establish a spending limit
  • Pad back-to-school shopping budget
  • Create a sinking fund for school supplies
  • Implement challenges to save money
  • Be a smart shopper
  • Figure out which expenses you can delay
  • Plan ahead for next year
  • Check for free or reduced-price back-to-school supplies

1. Assess What Is Needed

Start with the list of requested school supplies provided by your child’s teacher(s) or school district. Take inventory of what supplies you already have at home. Go through your kid’s dressers and closets to see what clothes and shoes still fit before going out to buy a new wardrobe.

When creating your list, don’t forget the costs that aren’t obvious. For example, will you need to buy uniforms or equipment for sports or other after-school activities? Will your child need a physical before heading back to school?

2. Establish a Spending Limit

It’s important to create a spending limit you’re comfortable with and that covers the basics. Shopping for school supplies without a budget will only set you up for overspending.

Once you have your shopping list together, you can start pricing items, even if you don’t plan on actually buying anything until closer to the start of the school year. Create your budget based on regular retail prices rather than current sales. Overestimating your expenses will give you a little wiggle room when it’s actually time to shop.

After you’ve totaled up how much you expect to spend, do you have enough money? If not, you’ll have to adjust.

3. Pad Your Back-to-School Shopping Budget

Earning extra money always provides a little financial stress relief. That holds true for back-to-school season.

Ask your employer about picking up extra shifts or working overtime. Find a temporary side gig, like dog walking, delivering groceries or doing odd jobs.

If you have older children, you could have them chip in on a portion of their school expenses — especially if they’re asking for pricey, name-brand clothing and school supplies.

Talk to your teens about school shopping expectations. Have them share some of the cost of items that don’t fall within your budget.

4. Create a Sinking Fund for School Supplies

A sinking fund is a pool of money that you add to over time to break a large expense into more affordable chunks.

Let’s say you’ve estimated you’ll spend $800 for the back-to-school season, and you get paid four times before school starts. Each payday, you should set aside $200 in your sinking fund to cover the upcoming expenses.

If you take money from your existing savings to start the sinking fund now, you can take out less each paycheck.

Setting up a direct deposit or automatic transfer will help you save money in your sinking fund without even thinking about it.

5. Implement Challenges to Save Money

Saving money can be difficult, especially when you don’t have much time. Saving challenges can help you put aside more money than you’d think.

If you shop using cash, challenge yourself to save a certain denomination whenever it hits your wallet. Perhaps you save all the $5 bills you get as change.

If you typically pay for things with a debit card, your money-saving challenge could involve rounding up each purchase to the nearest $5 increment and putting that difference toward your school expense savings.

Or try a no-spend challenge. Implement a 30-day freeze on discretionary spending so you have more money to pay for school supplies and related gear.

6. Be a Smart Shopper

Between now and the start of school, you’ll encounter enough sales promotions that it would be foolish to pay full retail price for anything.

In addition to taking advantage of great deals, here are some other smart back-to-school shopping strategies to keep in mind:

  • Buy generic
  • Compare prices online
  • Don’t snub discount shopping at thrift stores or the dollar store
  • Get items in bulk at warehouse stores, especially if you are buying for more than one child
  • Take advantage of coupons, rebate sites or cash-back apps
  • Shop during your state’s sales tax holiday
  • Sign up for emails to save a percentage at retail stores

The older your children get, the more opinionated they’ll probably be about what they want for the new school year. Talk to your kids about the cost of their school supplies and ask what is most important to them.

After identifying a couple select splurge items, find ways to get everything else for less. It’s a great way to teach your kids about how to budget.

7. Figure Out Which Expenses You Can Delay

You don’t always have to buy everything in time for the first day.

Your kids may not need new clothes right away, especially if the weather is still warm and they don’t have to wear fall clothes yet.

If you can, hold off a few weeks or more on buying the “fun” supplies, like new backpacks and lunchboxes. Retailers often will have great discounts after the back-to-school rush has died down and they are trying to get rid of that merchandise.

8. Plan Ahead for Next Year

Some schools don’t release supply lists until it’s too late to spend much time shopping around. Think ahead to what your student is likely to need next year, especially higher-priced items. For example, shop Fourth of July sales for clothes or for other items you know they’ll need in the future.

Use price trackers like CamelCamelCamel for Amazon or the Walmart price tracker app to watch for the lowest prices. Snatch them up throughout the year instead of waiting until the last minute.

9. Check for Free or Reduced-Price Back-to-School Supplies

Some national retail stores like Verizon and JCPenney offer free back-to-school giveaways. Verizon provides a free backpack filled with school supplies, one per child, while supplies last.

Various nonprofit organizations operating at the local level like The Salvation Army provide back-to-school assistance programs. Check locally for programs through your public library, police department or city recreation center.

Another option is to ask other parents in your social circle if they have hand-me-downs or unused supplies your kid could use. Also, Buy Nothing groups can be a great resource for procuring the bulk of the school supply list without spending a penny.


Transferring Ownership of a Family Business: A Step-by-Step Guide

Transferring ownership of a family business requires careful planning and consideration if you hope to execute it effectively. The intricate dynamics of family relationships, combined with the complex nature of business operations, make this process both challenging and crucial for long-term success. The way you handle this transition bears implications for your family, your business, and your legacy. In the interest of helping you handle your own transition, here are ten steps to consider taking with your family business.

Step 1: Get an Early Start

The transition process can be lengthy, often taking place over a number of years, so it’s important to initiate it well before you plan to actually step away from your business. An early start affords your team ample time to evaluate potential successors, train them, and allow them to gain the necessary experience before assuming the mantle on a full-time basis. It also provides time to plan for potential contingencies and address any hurdles as they arise.

Step 2: Develop a Succession Plan

A comprehensive succession plan outlines who will take over the business, when and how the transition will occur, and what the roles of various members of the business will be during and after the transition. Your plan should also articulate your vision for your company’s future. How will you ensure that your business continues to thrive in your absence? This plan should be communicated clearly to all stakeholders – family members as well as non-family stakeholders – to minimize misunderstandings and conflicts.

Step 3: Choose the Right Successor

The successor you identify should have the necessary skills, experience, and passion to guide your business toward the future you envision. While this may well be a family member or someone else internal, the most qualified and ideologically-aligned successor could end up being an external candidate. This is one of the most important decisions you’ll make for your company’s future and it will play a role in determining your legacy, so consider prioritizing the needs of your business over familial ties.

Step 4: Prepare Your Successor

Once you’ve chosen a successor, invest time in their development. This may involve mentoring, formal business education, or hands-on experience in various aspects of the business. The more prepared your successor is, the smoother the transition will likely be. Think about surrounding your successor with a trustworthy and knowledgeable team that can answer questions, offer guidance, and provide insight into the inner workings of the business.

Step 5: Make It a Gradual Transition

A gradual transition can also make the process smoother. This allows your successor to ease into their new role while letting you scale back your involvement in day-to-day operations at a pace you’re comfortable with. It also provides continuity for employees and customers.

Step 6: Establish Governance Structures

Well-defined governance structures can help manage family dynamics and business decisions more effectively. This might include a family council, a board of directors, or an advisory board comprising both family and non-family members. Even if you intend to keep the business within the family, incorporating a variety of perspectives into the decision-making process can pay off in a big way.

Step 7: Address Potential Conflicts

Business transitions can lead to conflicts due to perceived inequities or differing visions for the business, and this is often even more relevant for family businesses because the personal stakes are higher. That’s why it’s important to have open and honest conversations about potential issues and find ways to address them proactively.

Step 8: Consider Your Own Future

Don’t forget to account for yourself when you plan for the future of your business. As the current owner, consider what role, if any, you want to have in the business post-transition. How will you replace the feeling of ownership and fulfillment you derived from your business? You should also plan for your financial needs in retirement, and how the transition may impact these.

Step 9: Update Your Plan Over Time

The business environment, family dynamics, and personal circumstances can change, and these changes may require adjustments to your transition plan. Regularly reviewing and updating your plan will help keep your plan relevant, effective, and aligned with your wishes.

Step 10: Partner With a Professional

There’s a lot that goes into transferring ownership of a family business, and partnering with a trusted advisor who specializes in these types of transitions can help you juggle the many legal, financial, and emotional considerations the process entails. In addition to an advisor, you may want to engage other professionals such as lawyers, accountants, and business consultants who can provide valuable guidance and help you avoid potential pitfalls.

Transitioning ownership of a family business can be a challenging but rewarding process. By following the steps discussed above, you can help ensure a smooth transition that safeguards your business’s legacy and nurtures its future growth.


Robert (Rory) J. O’Hara III, CFP®, CRPC®

Founder I Senior Managing Partner

This material is intended for informational/educational purposes only and should not be construed as tax, legal or investment advice, a solicitation, or a recommendation to buy or sell any security or investment product. Investments are subject to risk, including the loss of principal. Some investments are not suitable for all investors, and there is no guarantee that any investing goal will be met. Certain sections of this material may contain forward-looking statements. Forward-looking statements are not guarantees of future performance and involve certain risks and uncertainties, which are difficult to predict. Past performance is no guarantee of future results. Third-party links are provided to you as a courtesy. We make no representation as to the completeness or accuracy of information provided at these websites. Information on such sites, including third-party links contained within, should not be construed as an endorsement or adoption of any kind. Please consult with your financial professional and/or a legal or tax professional regarding your specific situation and before making any investing decisions.

Financial Lessons to Share With Your Children

The need for early financial education has perhaps never been greater.

According to an annual survey by the Global Financial Literacy Excellence Center, fewer than 50% of Americans were able to correctly answer at least fourteen of twenty-eight basic questions regarding their personal finances. The same survey discovered that 39% of US households lack sufficient savings to cover a month’s worth of expenses, illustrating widespread financial vulnerability.1 These figures underscore
the importance of achieving a base level of financial literacy in order to thrive in the modern economy.

So, who should be the one to prepare our children with the knowledge that’s necessary to confront today’s financial challenges? Skills such as budgeting, bill paying, and appreciating the value of a dollar are instrumental to your child’s future success, but most school curriculums fail to equip students with even a basic foundation of financial literacy. As a result, the responsibility of teaching these skills and encouraging sound financial habits often falls on parents.

Strategies for Instilling Sound Financial Values

Financial literacy refers to the understanding of financial concepts and money-management skills, particularly the ones an adult might need to make smart, financially-sound decisions. Some of these skills include budgeting, using credit cards, taking out loans, paying bills, and planning for retirement.

Some of these topics might come up in a high school home economics course, but most will not be adequately covered. Without your influence, your child may reach adulthood unprepared to handle some of these important tasks, potentially leaving them vulnerable to those who would seek to take advantage of them, such as predatory lenders, scammers, or needy friends and relatives.

In the interest of setting your child up for success, here are some simple, but fundamental, financial lessons that you can incorporate into your child’s routine.

Teaching Through Storytelling

Do you like to read to your children in the evening before bed? Why not add a story about money to your routine? After all, the most effective way to engage your children is by integrating learning opportunities into their favorite activities so it doesn’t feel like they’re being lectured. Building fun or familiar associations can also help kids retain pertinent information.

Instead of simply telling your kids to save money, consider illustrating how saving money is important by sharing a story. You could, for instance, weave a story about a kid who decided to splurge all of his money on snacks and therefore couldn’t afford the sneakers he wanted, unlike his classmate, who chose to save her money. A narrative like this reinforces the importance of budgeting, goal-setting, and distinguishing between wants and needs.

When coming up with educational stories for your kids, try to adjust the context and messaging to match their age group. Having the story be accessible and relatable is key to ensuring the lesson is retained.

Establishing the Right Mindset

It becomes harder to change the way we think as we get older. That’s why it’s crucial for you to consider instilling financial values in your children while their brains are still malleable and receptive to new ways of thinking. Think about encouraging your child to use the concepts of financial tradeoffs and problem-solving when contemplating purchases.

For example, let’s say you go to a toy store with your child and they’re drawn to an expensive toy. Instead of turning them down on the premise that they don’t need or can’t afford that particular toy, you can challenge them by asking how they’d go about earning it for themself. Posing questions like this can lead them to open their mind and consider the costs associated with their purchases. Will they need to take on more chores or make an adjustment to their allowance saving plan? Do they value this purchase enough to make sacrifices elsewhere?

Going through this exercise with your children can help them establish priorities in their mind and recognize that everything comes at a cost.

Enjoying the Fruits of One’s Labor

When it comes to gaining perspective, there’s no substitute for firsthand experience. That’s why one of the most effective methods of instilling financial discipline in your children is to let them earn their own money. By encouraging them to work for the things they want, they’re likely to learn the value of money for themselves.

While your children are young, you can start delegating simple household tasks such as washing the dishes, taking out the trash, and mowing the lawn. When they’re old enough to receive an allowance, you can start paying them a modest amount for the chores they do. It’s important that the money your children receive is clearly tied to the work they do. This means that if they don’t complete their chores, they don’t get paid. The idea is to build an association between hard work and the financial payoff that results from it.

The trial and error phase is an essential part of the financial learning curve, so don’t be afraid to let your children make mistakes early on. After all, haven’t each of us made decisions with our money that we later came to regret? Having your children go through these learning experiences while they’re still living at home can help ensure they don’t make the same mistakes as adults when the stakes are higher.

Being Patient Pays Off

Delaying gratification usually leads to greater rewards. This is a lesson that you’ve likely come to appreciate over the course of your life, but it can be a harder concept to grasp as a child.

For example, those who opt to invest in their retirement will ultimately get to enjoy their Golden Years more comfortably than those who spend all of their money as it comes in. Similarly, people who continue to live with their parents to save on rent can end up having more savings in the future. It bears mentioning that delaying gratification in these ways can be harder for children in lower-income families than for children in high-income ones – see the results of the famous “Marshmellow Test” for evidence of this – but the lesson is an important one nonetheless.

Saving money is a habit, which means incorporating it into your routine takes practice. You can get a headstart habituating your child to saving by having them put aside a portion of all the money they earn as soon as they receive it. Whether they use a piggy bank or a savings account as their savings vehicle will depend on their age.

Teaching Your Kids About Money

Establishing a base level of financial literacy while your child is young can go a long way toward preparing them for the challenges of adulthood. Financial skills are more easily grasped when they’re taught gradually and the lessons are made accessible to the recipient. The key is getting creative with the way you deploy those lessons – how can you express a financial concept in a way that’s fun and memorable? Doing so effectively could end up paying off in a big way.

If you have any questions regarding your finances or would like to discuss strategies for instilling sound financial values in your kids, connect with us at any time.


Robert (Rory) J. O’Hara III, CFP®, CRPC®

Founder I Senior Managing Partner

This material is intended for informational/educational purposes only and should not be construed as tax, legal or investment advice, a solicitation, or a recommendation to buy or sell any security or investment product. Investments are subject to risk, including the loss of principal. Some investments are not suitable for all investors, and there is no guarantee that any investing goal will be met. Certain sections of this material may contain forward-looking statements. Forward-looking statements are not guarantees of future performance and involve certain risks and uncertainties, which are difficult to predict. Past performance is no guarantee of future results. Third-party links are provided to you as a courtesy. We make no representation as to the completeness or accuracy of information provided at these websites. Information on such sites, including third-party links contained within, should not be construed as an endorsement or adoption of any kind. Please consult with your financial professional and/or a legal or tax professional regarding your specific situation and before making any investing decisions.

Long-Term Care Insurance Primer

It’s difficult to predict what your medical needs will be years down the road, but a long-term care insurance policy can serve as a safety net, providing financial relief for your family should you or a loved one require a higher level of care.

Long-term care (LTC) insurance is designed to help cover the costs associated with care as we age. This can include nursing home care, in-home care, adult daycare, and assisted living facilities, among other services not typically covered by traditional health insurance or Medicare. In this guide, we’ll cover what you need to know in order to make an informed decision regarding long-term care coverage for yourself or a loved one.

Why is LTC Insurance Important?

As we age, the likelihood of us needing some form of long-term care grows, particularly as life expectancies increase. In fact, it’s estimated that 70% of American seniors will require long-term care services at some point in their lives, with 20% of seniors requiring more than 5 years of care.

Chronic illnesses, disability, or cognitive issues like Alzheimer’s may necessitate daily assistance, which can be financially burdensome for you and your loved ones. Medicare typically doesn’t cover these long-term services, which means you’ll likely have to pay for them out of pocket. LTC insurance not only helps ensure access to necessary care without draining your savings, but it also offers more choices when it comes to the type of care received and where it’s provided. Moreover, it can alleviate the financial and emotional stress felt by family members who might otherwise bear the responsibility of care.

Long-Term Care Options

There’s no one-size-fits-all solution to long-term care planning and a number of different policies exist to fit your unique needs. Here are some of the options available for you to choose from:

Traditional Long-Term Care Insurance. This type of policy pays out a pre-determined amount for each day of care, up to a maximum limit specified in the agreement. While these policies typically offer the most comprehensive coverage, they can entail high premiums and have a “use it or lose it” structure, meaning if you don’t use the benefits, you don’t get your premiums back.

Hybrid Long-Term Care Insurance. These policies combine life insurance or an annuity with long-term care coverage. If you don’t use the long-term care benefit, the policy pays a death benefit to your beneficiaries. Hybrid policies
often have a “return of premium” feature, which ensures the money you invest isn’t lost if you don’t use the policy.

Shared Care Policies. These are for couples who want to share their coverage. If you exhaust your benefits, you can start using your partner’s, and vice versa.

Life Insurance with Long-Term Care Riders. Some life insurance policies offer riders that allow the policyholder to use a portion of the death benefit for long-term care expenses.

Partnership Policies. These allow policyholders to retain a portion of their assets and still qualify for Medicaid if their long-term care insurance benefits are exhausted.

Short-Term Care Insurance. These policies are similar to traditional long-term care insurance policies, but benefits typically only last for up to a year. They are usually easier to qualify for and entail lower premiums.

Shopping For Long-Term Care Insurance

As you assess your LTC coverage options, here are some questions to help guide your search.

What Will Your Needs Be? It’s impossible to forecast exactly what your care needs will be, but you can get a good sense of them by considering your health, family history, and whatever support you may receive from friends and family. When picking a type of coverage, you’ll likely want to balance your anticipated needs with how much you’re willing to spend on premiums.

Do You Understand the Costs? Premiums typically vary based on your age, health, benefit amount, benefit period, and elimination period you choose. The costs associated with each type of coverage can range drastically based on these factors.

Who is the Best Provider for You? Before committing to a policy, remember to research the various providers to find the one you’re most comfortable with. As you conduct your search, keep an eye out for companies with strong financial ratings and positive customer reviews.

Could You Use Professional Advice? The LTC insurance landscape can be complex and difficult to navigate. A financial advisor or insurance professional can work with you to assess your current and future care needs, then help you identify a coverage option that suits you.

Planning for Long-Term Care

As with any major decision, seeking the guidance of a financial professional can help you gain a clear understanding of your options and then create a plan that fits within the context of your broader financial picture. Planning for healthcare needs and ensuring you have the right coverage in place can be tricky, but an advisor can simplify the process while affording you the confidence of knowing your family’s interests are protected.


Robert (Rory) J. O’Hara III, CFP®, CRPC®

Founder I Senior Managing Partner

This material is intended for informational/educational purposes only and should not be construed as tax, legal or investment advice, a solicitation, or a recommendation to buy or sell any security or investment product. Investments are subject to risk, including the loss of principal. Some investments are not suitable for all investors, and there is no guarantee that any investing goal will be met. Certain sections of this material may contain forward-looking statements. Forward-looking statements are not guarantees of future performance and involve certain risks and uncertainties, which are difficult to predict. Past performance is no guarantee of future results. Third-party links are provided to you as a courtesy. We make no representation as to the completeness or accuracy of information provided at these websites. Information on such sites, including third-party links contained within, should not be construed as an endorsement or adoption of any kind. Please consult with your financial professional and/or a legal or tax professional regarding your specific situation and before making any investing decisions.

1 “How Much Care Will You Need?” How Much Care Will You Need? | ACL Administration for Community Living, February 18, 2020. https://acl.gov/ltc/basic-needs/how-much-care-will-you-need.

Funding Your Child’s Education

As the cost of higher education continues to rise, many parents and future students are confronted with the challenge of planning for this significant financial responsibility. Some students may receive support in the form of grants or scholarships, but these don’t always cover the full cost of a college education. Student loan debt can take years to erase and may make it harder to reach your financial goals.

Thankfully, there are a number of investment accounts that can make it easier to save for education expenses. Let’s discuss a few of the options that may be worth considering.

529 Savings Plan

The predominant college savings vehicle is the 529 savings plan, and it’s available everywhere across the US in one form or another. These plans are state-sponsored and can be categorized as either education savings plans or prepaid tuition plans, with the primary difference between the two being how their distributions can be allocated.

Anyone – parents, grandparents, extended relatives, friends, and even your child themself – can open and make contributions to this type of plan. Contribution limits differ from state to state.

529 Education Savings Plan

The standard type of 529 plan, an education savings account functions a lot like other tax-advantaged investment accounts in that it provides incentives that make it easier to save towards your goals – school, in this case. Contributions occur on an after-tax basis and funds in the account can be invested tax-free. No income taxes are due upon withdrawal as long as the money is spent on qualifying education expenses.

You can withdraw from a 529 education savings account to pay for qualifying education expenses starting from the time the beneficiary starts kindergarten on through their college years. If your child goes to a private elementary or high school, your withdrawals can also be used to help pay for this tuition. However, the IRS only allows up to $10k per year to be spent from this account between the years of kindergarten and 12th grade.

If your child doesn’t end up going to college, you can change the beneficiary on the account to another eligible beneficiary or convert your 529 to a Roth IRA. Taking non-qualified distributions from your 529 may result in having to pay income taxes on the withdrawal plus a 10% penalty.

529 Prepaid Tuition Plan

The prepaid tuition plan is designed to help students pay for public, in-state college by allowing them to pay some or all of the tuition costs ahead of time. Your account contributions are invested and guaranteed to grow at the same rate as college tuition costs, ensuring that the contents of the account scale to fit your tuition needs.

In comparison to the education savings plan, you’re more limited when it comes to deploying a prepaid tuition plan’s funds. The withdrawals from this account can only be used for college tuition and fees – they cannot be used for room and board or other expenses commonly associated with university. Additionally, prepaid tuition plans are only available in certain states.

Generally speaking, prepaid tuition plans offer a simpler and less risky alternative to the standard 529 education savings plan, albeit with less flexibility. If your child’s college plans change, you may be able to convert the account into one that helps cover private or out-of-state tuition, but there’s no guarantee that your prepaid plan will cover all of the new tuition costs.

Roth IRA

Although Roth IRAs are most frequently used to save for retirement, they can also be used to pay for qualified educational expenses. No additional penalty is assessed on these withdrawals, but you’ll still have to pay income taxes if you make any prior to retirement age. This tradeoff may be worth considering for parents because of the simplicity that comes with managing fewer accounts. Any excess funds that aren’t ultimately used for college can remain invested within the account for retirement, so you can save for both goals simultaneously.

Custodial UGMA and UTMA Accounts

The Uniform Gift to Minors Act (UGMA) and the Uniform Transfer to Minors Act (UTMA) offer two custodial savings accounts that can be used to save for your child’s education. Contributions to these accounts are made post-tax, and while there is no limit to the amount you can contribute to these accounts, you will have to pay gift taxes on contributions that exceed $17,000 per year. Unlike the 529 savings plan, the funds in these accounts are not limited to qualified education expenses; they can be used for anything.

Choosing the Right Plan

When saving for your child’s education, there are many plans for you to choose from that afford you the potential to grow your contributions over time. As with your other investments, time and discipline are key to achieving your long-term goals. If you could use help deciding which plan best suits your family’s needs, reach out to your financial advisor.


Robert (Rory) J. O’Hara III, CFP®, CRPC®

Founder I Senior Managing Partner

This material is intended for informational/educational purposes only and should not be construed as tax, legal or investment advice, a solicitation, or a recommendation to buy or sell any security or investment product. Investments are subject to risk, including the loss of principal. Some investments are not suitable for all investors, and there is no guarantee that any investing goal will be met. Certain sections of this material may contain forward-looking statements. Forward-looking statements are not guarantees of future performance and involve certain risks and uncertainties, which are difficult to predict. Past performance is no guarantee of future results. Third-party links are provided to you as a courtesy. We make no representation as to the completeness or accuracy of information provided at these websites. Information on such sites, including third-party links contained within, should not be construed as an endorsement or adoption of any kind. Please consult with your financial professional and/or a legal or tax professional regarding your specific situation and before making any investing decisions.

A 529 plan is a college savings plan that allows individuals to save for college on a tax-advantaged basis. Every state offers at least one 529 plan. Before buying a 529 plan, you should inquire about the particular plan and its fees and expenses. You should also consider that certain states offer tax benefits and fee savings to in-state residents. Whether a state tax deduction and/or application fee savings are available depends on your state of residence. For tax advice, consult your tax professional. Non-qualifying distribution earnings are taxable and subject to a 10% tax penalty.

Financial Tips for New and Expecting Parents

1. Shop for Insurance

Health insurance can be invaluable for newborns and parents, so think about adding your baby to your insurance plan as soon as you’re able to. Your insurance often covers the delivery of your baby as well as their post-birth care and subsequent wellness visits. Since having a baby is a qualifying life event, you may be allowed to change policies or upgrade to a higher tier of coverage if it would better suit your family’s needs.

You never know when a sudden injury or illness could keep you from working – and for how long – so disability insurance might also be a wise investment to protect your earning potential. Consider a policy that can cover essential costs like debts, childcare, and different household expenses.

You can also opt for a life insurance plan to replace part of your income in the event of an untimely death. This can serve as a safety net for your loved ones, helping them pay for things like a mortgage, childcare, and college tuition.

2. Get Your Estate Plan in Order

Without important legal documents in place to handle your finances once you’re no longer around, your loved ones may be burdened with unnecessary confusion and heartache. That’s why it’s important to decide where you’d like your assets to go and stipulate other end-of-life preferences. While these can be difficult subjects to talk about, setting up a trust account or will can save your family and your children time, money, and stress should anything happen to you unexpectedly or otherwise.

If you already have an estate plan in place, consider updating these documents regularly with your attorney, especially when you’re expecting a child. Beyond the financial concerns, a living will also allows you to assign a legal guardian for your children so you can ensure they’re cared for in your absence.

3. Start a College Fund

College is expensive and tuition costs seem to rise year after year. While things like grants, scholarships, and other forms of financial aid may help reduce the amount you have to pay for school, starting to save early can help relieve some of the stress funding your child’s education might impose down the road.

Think about opening a 529 college savings account (or another account that serves a similar purpose) while your child is still young to give your contributions more time to grow. Some parents choose to start saving when a pregnancy is confirmed, while others wait until after their child is born. Note that the stated beneficiary of the account must have a social security number, so if they’re still unborn, you’ll have to name another beneficiary in the meantime.

4. Take Advantage of Tax Breaks

The IRS offers a number of tax breaks to parents that can help you manage the costs associated with raising a child. The Child Tax Credit, for instance, allows you to claim a credit for each of your children younger than 17. When your child is older, the American Opportunity Tax Credit and Lifetime Learning Credit can help offset the costs of higher education.

Flexible spending accounts (FSAs) are another tax-advantaged option that parents can use. These employer-sponsored programs cover out-of-pocket costs for health and childcare. That includes expenses for daycare, Pre-K, and before- and after-school programs for children up to 13 years old.

5. Bolster Your Emergency Fund

Emergency savings are an essential part of your family’s financial security. These “rainy day” funds exist to protect you and your loved ones in the event of an unexpected job loss, injury, illness, or any other unforeseen expense. It’s often recommended that parents keep between six and 12 months’ worth of living expenses earmarked for emergencies, although your needs may differ based on your family’s circumstances. Consider housing these funds somewhere you can easily access them when needed, like a savings or money markets account.

6. Don’t Lose Track of Your Retirement Plan

While planning for your children’s future is critical, you can’t forget about yourself. Raising kids is hard work, and you deserve to retire when you’re ready. To help ensure you can support yourself later in life, take advantage of your employer-sponsored 401(k) program – especially if the company you work for matches a certain percentage of contributions. If you don’t have access to a 401(k), think about using an IRA. These long-term savings accounts can be used to grow your nest egg over the course of your working life. After all, you may not want to depend on financial support from your children down the road.

Building Your Plan

Adding to the family can be a big financial step, but by being proactive with your planning, you can help make the transition smoother and less stressful. After all, you want to be enjoying parenthood during this time, not worrying about money. If you’re a new or expecting parent looking to get your finances in order, a financial advisor can work with you to find solutions that address your unique needs. Connect with an advisor today to learn more.


Robert (Rory) J. O’Hara III, CFP®, CRPC®

Founder I Senior Managing Partner

This material is intended for informational/educational purposes only and should not be construed as tax, legal or investment advice, a solicitation, or a recommendation to buy or sell any security or investment product. Investments are subject to risk, including the loss of principal. Some investments are not suitable for all investors, and there is no guarantee that any investing goal will be met. Certain sections of this material may contain forward-looking statements. Forward-looking statements are not guarantees of future performance and involve certain risks and uncertainties, which are difficult to predict. Past performance is no guarantee of future results. Third-party links are provided to you as a courtesy. We make no representation as to the completeness or accuracy of information provided at these websites. Information on such sites, including third-party links contained within, should not be construed as an endorsement or adoption of any kind. Please consult with your financial professional and/or a legal or tax professional regarding your specific situation and before making any investing decisions.

A 529 plan is a college savings plan that allows individuals to save for college on a tax-advantaged basis. Every state offers at least one 529 plan. Before buying a 529 plan, you should inquire about the particular plan and its fees and expenses. You should also consider that certain states offer tax benefits and fee savings to in-state residents. Whether a state tax deduction and/or application fee savings are available depends on your state of residence. For tax advice, consult your tax professional. Non-qualifying distribution earnings are taxable and subject to a 10% tax penalty.