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Who’s in Charge Here? Aging Parents Resist Interfering ‘Helicopter’ Children

Joshua Coleman remembers watering down a glass of wine before giving it to his father, then in his 90s.

“What the hell is this?” he recalls his father asking.

“I feel a little guilty about that now,” says Dr. Coleman, whose father died in 2001. “The poor old guy had few remaining pleasures left. But I would have felt bad had he gone back to assisted living and slipped.”

There’s a fine line between being an appropriately concerned adult child and an overly worried, helicopter one, says Dr. Coleman, a psychologist who specializes in family dynamics. If a parent is in an accident, it might be time to talk about driving, as he did after his father sideswiped three cars. But if Mom doesn’t want to wear a hearing aid, it might be wise not to nag. Maybe she doesn’t want to listen to anyone at the moment.

When Cathy Walbert, a mother of five, picked up a baby at a family gathering last year, her daughter rushed to her side, worried she might drop her. Another daughter hovers when Mrs. Walbert—who says she probably is more candid than she was years ago—starts talking to someone. Her son tells her to be careful on the steps.

“I think, ‘What’s wrong with you people?’ I’m an adult,” says Mrs. Walbert, of Pittsburgh who says she is older than 75.

“You start treating them like a child, saying ‘Don’t do this’ or ‘Don’t do that,’ ” says her daughter, Lisa Spor. Her mother, she says, usually responds “What do you mean, ‘Don’t do that?’ ”

A big question adult children need to ask is whether they are intervening for their parents’ well-being or to alleviate their own worries, says William Doherty, a family therapist and professor of Family Social Science at the University of Minnesota. “If your 80-year-father is still driving, you worry,” even if he is capable of driving, he says. “If he’s not driving, you don’t worry, but your father has had a big loss.”

During her career as a clinical psychologist, Laura Carstensen, who is also founding director of Stanford University’s Center on Longevity, heard from both sides. Parents wanted advice on how to get their kids off their back. Adult children wanted advice on how to persuade their parents to give up their family home.

In general, her advice is that unless a parent is cognitively impaired and not aware of the level of his or her impairment, children need to respect the parent’s decision.

“These are difficult situations,” she says. “I know that first-hand.”

In 2015, Dr. Carstensen tried to talk her father, then 95, into leaving New York and moving to the California home she shares with her husband. Her father, a scientist, was still writing and publishing papers. But he was having trouble with balance and lived in a two-story house where he had to go down to the basement to do his laundry.

“Was I worried? Yes, I was worried,” she says. He was hard of hearing, so phone calls were difficult. A few times when she couldn’t reach him, she worried that something had happened, only to learn he had simply gone to the drugstore.

Her father did agree to have activity sensors installed in certain places in the house—his chair by the computer, the refrigerator, the cutlery drawer. Every morning, Dr. Carstensen would check the sensors and if they indicated activity, she knew not to worry.

“He really wanted to live in his own home,” she says. She talked to him about her concerns that he would fall. He told her that falling down in his own home was as “good a way to go as he could imagine.” Her father did eventually die, at 96, after a fall at home.

Do kids need to monitor every time a parent crosses the room or goes to the bathroom? You have to give them space to live their own life.’

                        —Grace Whiting, chief executive of the National Alliance for Caregiving

Grace Whiting, chief executive of the National Alliance for Caregiving, says monitoring devices can turn into a proxy helicopter. They can be extremely useful, especially in the case of an emergency, she says, as long as they don’t compromise the dignity of an older adult. “Do kids need to monitor every time a parent crosses the room or goes to the bathroom?” she asks. “You have to give them space to live their own life.”

Even small, well-intentioned acts can send the wrong message to parents, says Ellen Langer, a Harvard psychologist and author. If a parent fumbles with the key when trying to unlock a door, kids should be patient and wait, rather than grabbing the key and taking over. While you may be trying to be helpful, the message, deliberate or not, is that you are competent, and the parent isn’t, she says.

When Rip Kempthorne’s parents were having trouble covering the mortgage on their farm in Kansas, he suggested they relocate to Olympia, Wash., and move in with his young family. They did. Charley, 80, and June, 71, have a basement apartment to themselves. Their 5-year-old granddaughter runs in and out.

“There was no pressure,” says Charley Kempthorne. He and his wife expect the time will come when they can’t make decisions on their own and are grateful to be with family before that time comes. For the moment, the younger Kempthornes don’t have to hover over Charley and June because they watch out for each other.

June tells Charley to put in his hearing aid. He tells her not to leap out of the car. After several falls, she has given up sandals for sturdier shoes. “They won’t let me carry groceries,” says June, but that is probably a good thing. “I tend to carry too much and fall over.”

David Solie, an expert in geriatric psychology, says he was overly anxious when caring for his mother, Carol. As her health deteriorated, he was urged by a cousin, who lived closer to her, to move her into assisted living, which she strongly opposed. At one point, he went to the family attorney asking what he could do. The attorney told him his mother moved slowly and couldn’t open a jar of food, but was coherent and articulate. He advised Mr. Solie to wait, which he ultimately did. His mother remained at home until she had a massive stroke.

In retrospect, Mr. Solie says he wishes he had relaxed more and not been so consumed by getting her to give up her home.

Mr. Solie cautions other adult children against trying to make sure everything is perfect, with every pill taken and every appointment kept. “Don’t point out everything that they forgot or that they aren’t as clean as they should be,” he says. “Cut them some slack.” And if they want to date—something that many adult children oppose for fear of their parents being hurt or losing part of their inheritance—don’t stand in the way. “Allow them to be happy.”

How to avoid becoming a helicopter child:

  • Unless your father or mother has dementia, don’t make decisions for him or her. Discuss matters and remember he or she has a right to take informed risks.
  • If you and your parents don’t agree on their level of competence, consult a professional together.
  • Don’t go through your parents’ mail or screen their calls unless asked.
  • Pick your battles. If a parent is getting lost or has stopped bathing, talk about what help he or she might need to remain independent. If his or her clothes don’t match, get over it.
  • If a parent has cataracts in both eyes and continues to drive at night, ask the primary-care physician to intervene.
  • If your parents forget to turn off the stove, don’t jump to the conclusion they can’t stay in their home. Look into devices that turn stoves off automatically.
  • Use classic ‘I’ language, such as: ‘I am concerned about you living in a two-story house after your heart attack.’ Avoid: ‘You can’t live here anymore.’

Write to Clare Ansberry at clare.ansberry@wsj.com. Appeared in the April 24, 2018, print edition as ‘Aging Parents Resist ‘Helicopter’ Children The Right Approach.’

LPL Tracking 1-728975

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Sell in May? Not so fast….

May’s arrival has brought warmer weather to many parts of the U.S. (finally), but it also brings talk of one of the most widely cited stock market clichés in history. “Sell in May and go away” is a longstanding investment adage because historically, the six-month period from May through October has been the weakest stretch of the year. However, before you spring into action, it’s important to step back and look at the big picture of what’s really driving our current market environment. The fundamentals of impressive earnings, modest valuations, and a strong economic backdrop may be better indicators to watch.

Looking at these underlying factors of today’s economic and market environment suggests opportunity for further growth, despite this historically weaker season. Here are a few highlights to note:

  • Impressive earnings season. With most companies having reported first quarter results, earnings for the quarter are tracking to a double-digit increase (more than 20%) compared to the first quarter of last year. Guidance for future earnings has also been positive.
  • Solid economic growth. The initial estimate for gross domestic product for the first quarter was a slowdown from the prior three quarters, but it still exceeded expectations. The slowdown seems to be a result of temporary factors, and leading indicators suggest continued growth for the U.S. economy.
  • Reasonable stock valuations. Although stock valuations are slightly above average right now, when considering the positive earnings outlook, low inflation, and low interest rates, stocks don’t appear to be as expensive as some would suggest.

Combined, these factors paint a favorable picture overall for the potential of further market gains. At the same time, it’s prudent not to dismiss the possibility for some seasonal weakness or other risk factors that could impact the markets. The possibility for a modest pullback during this upcoming period remains; for suitable investors, this could present an opportunity to rebalance portfolios and potentially add to equity positions. All in all, for many investors, the main takeaway is to stay focused on the long term, as reacting to seasonal weakness by selling stocks could prove detrimental to the long-term performance of portfolios.

While keeping an eye on historical trends and seasonal patterns is important, as they can provide valuable context to the market environment—they shouldn’t dictate your investment strategy. So don’t let the “sell in May” adage bring you down. Enjoy the warmer weather and extra hours of sunlight, and stick to your long-term investment plan.

As always, if you have any questions, I encourage you to contact me.

Important Information

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual security. To determine which investment(s) may be appropriate for you, consult your financial advisor prior to investing. Economic forecasts set forth may not develop as predicted. All performance referenced is historical and is no guarantee of future results. Indexes are unmanaged and cannot be invested into directly.

Investing involves risks including possible loss of principal. No investment strategy or risk management technique can guarantee return or eliminate risk in all market environments.

Rebalancing a portfolio may cause investors to incur tax liabilities and/or transaction costs and does not assure a profit or protect against a loss. This information is not intended to be a substitute for specific individualized tax or legal advice. We suggest that you discuss your specific situation with a qualified tax or legal advisor.

This research material has been prepared by LPL Financial LLC.

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Where Retirees Underestimate Spending

Where Retirees Underestimate Spending         

Underestimating how much you’ll spend can be costly, so it’s key to know the common pitfalls

 

Navigating retirement can be difficult for lots of reasons. One of the biggest is that it forces people to make plans based on spending assumptions that won’t become a reality for decades.

Guessing wrong can be the difference between a comfortable retirement and one that is a struggle.

“It’s a lot more difficult to recover in retirement,” says Adam Van Wie, a financial planner in Jacksonville Beach, Fla. “You can try to find another job, but that’s not an option for everyone.”

We spoke to financial advisers about some of the most frequent mistakes people make when it comes to estimating how much they’ll spend in retirement.

Helping family. You may be willing to slash your own expenses in retirement if times get tough. What will you do if your children, or grandchildren, get in a bind? Saying no is much harder.

  • In Defense of thsy Retirement

But saying yes can imperil your own retirement. A number of parents who guaranteed their children’s school loans have seen their own finances ruined when the child defaulted on the loan.

Mark McCarron, a financial planner in Charlottesville, Va., is working with a retired couple who paid for the wedding of one daughter, and expect to pay shortly for the wedding of their other daughter as well.

They have the cash, says Mr. McCarron. The rub is that they just hadn’t planned on paying for weddings when they retired, and it reduces the funds they can draw upon for other purposes.

Big-ticket periodic items. Would-be retirees often meticulously estimate day-to-day expenses, but forget to factor in more periodic, and mostly predictable, expenses like a new car or a new roof. And those big-ticket items inevitably blow holes in their budgets.

Dana Anspach, a financial planner in Scottsdale, Ariz., recommends that clients set aside 3% of the value of their house each year for maintenance—as well as plan on setting aside money for the periodic new car.

One caveat: Beware of taking big chunks of money out of a 401(k) or other tax-deferred accounts, Ms. Anspach says. Such withdrawals are treated as taxable income and can push retirees into a higher tax bracket. A better approach is to withdraw the money gradually over a two- or three-year period for an expected expense.

Belinda Ellison of Greenville, S.C., who recently retired as a lawyer, sets aside money for unforeseen landscaping expenses. So she was ready when she had to spend $10,000 recently to remove a huge tree on her property. Ms. Ellison owns a 100-year-old home, and has another fund set up for renovation expenses.

It’s not so with everybody she knows. “I have friends who have trouble when they need a new set of tires,” Ms. Ellison says.

Entertainment. Many retirees are surprised at how much their entertainment costs rise when they stop working, says Neil A. Brown, a financial adviser in West Columbia, S.C. Instead of working five or six days a week and playing one, it can be the opposite. “You’ve got five or six days to play,” Mr. Brown says.

Americans age 65 to 74 spent an average $5,832 on entertainment in 2015, according to a study from the Employment Benefit Research Institute, based in Washington, D.C. Entertainment spending declines with age; people 85 and over in the study spent $2,232 on average.

Health care. Even Medicare recipients are frequently shocked by the cost of health care, says Joan Cox, a financial planner in Covington, La. Ms. Cox says a married couple in their late 60s can expect to spend close to $13,000 a year in medical expenses. That assumes $8,000 in Medicare premiums and supplemental insurance premiums, $1,200 for drug coverage, and $3,700 in out-of-pocket expenses.

 

“I’ll do their financial plan, and it looks like they have plenty of assets” for retirement, she says. “Then I’ll put in health-care costs, and all of sudden their plan doesn’t work.”

Drugs costs, in particular, surprise retirees, says David Armes, a financial planner in Long Beach, Calif., who specializes in helping clients evaluate Medicare options. “Many of these cost drivers cannot be accurately predicted when you’re in your 60s,” he says. “There’s no way for 65-year-olds to know, for instance, whether they will need to take expensive brand-name drugs when they reach their 80s.”

For affluent retirees, there can be another surprise with Medicare. Couples whose modified adjusted gross income exceeds $170,000 a year must pay higher premiums. To lessen those expenses, a couple might try shifting income to one year so that they will avoid higher Medicare premiums in other years, says Mr. Armes.

Long-term care. The need for long-term care is perhaps the most costly unexpected expense in retirement.

 

About 15% of retirees will spend more than $250,000 on such care, according to a research report to be released this spring by Vanguard Group The problem is it is impossible to know who will be part of that 15%. Some 50% of retirees won’t spend anything at all, and 25% will spend less than $100,000, the Vanguard report says.

“It’s hard to plan for,” says Colleen Jaconetti, a senior investment analyst with Vanguard.

For years, financial planners urged people to buy long-term care insurance. But that market has shrunk dramatically in recent years after insurers underestimated costs and were forced to jack up premiums or withdraw from new sales. Some insurers now offer hybrid policies that combine life insurance and long-term-care insurance. These policies allow consumers to tap their death benefits early to pay for costs such as help with feeding, bathing and other personal needs.

Living a long life. One of the biggest mistakes people make in estimating retirement expenses is underestimating how long they will live.

The average 65-year-old in the U.S., for example, is likely to live an additional 19.4 years, according to data from the National Center for Health Statistics.

Obviously, the longer the life, the more the spending. It can be a good problem to have—but one that surprises too many people.

“Everybody worries about dying young,” says Prof. David Littell of the American College of Financial Services. “People should be more worried about living too long.”

Mr. Templin is a writer in New Jersey. He can be reached at reports@wsj.com.

Appeared in the April 23, 2018, print edition.

 

This article was prepared by a third party for information purposes only. It is not intended to provide specific advice or recommendations for any individual. It contains references to individuals or entities that are not affiliated with Cornerstone wealth Management, Inc. or LPL Financial. LPL Tracking# 1-723395

 

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Staying Focused

The month of April has opened with some volatile market swings, accompanied by speculation of an escalating trade war. It’s during times like this that we need to take a step back, avoid getting caught up in the headlines, and look at the big picture of the economic and market environment. In this case, that means focusing on the fundamentals of positive economic growth, a strong earnings outlook, and still low interest rates. These are the factors that may ultimately lead to this market’s recovery and get us back into positive territory.

We’ve been experiencing volatility in the markets since early February of this year, driven first by wage inflation fears (which have since been discounted), and now the big stories are trade concerns and regulatory risk in technology. Concerning trade, the war of words between China and the United States has escalated, but it’s important to note that nothing has been put into effect yet. There is room for negotiation, and a compromise may be reached before these proposed tariffs are put in place. That said, uncertainty about the outcome is weighing on the markets.

However, it’s important to remember that volatility and the process of the stock market bottoming out is often not a one-time sell-off. For example, looking back to late 2015, we experienced a market decline in August but—despite a temporary rebound—volatility continued and the decline did not hit bottom until February 2016. So essentially, this period of volatility extended from August 2015 until February 2016. The important takeaway here is that this volatility could continue for a period of time and it doesn’t necessarily mean we’re entering a bear market.

In fact, having begun 2018 expecting a degree of volatility, LPL Research continues to maintain its forecast for positive stock returns for the year.* They also remain confident in their expectation that a “return of the business cycle”—driven by fundamentals and fiscal stimulus—will lead to continued growth and stock market gains.

The following factors may be supportive of positive market returns:

  • Increased fiscal stimulus thanks to tax cuts and increased government spending
  • Estimated double-digit earnings growth throughout 2018*
  • Still low interest rates, relative to historical averages

The bottom line is that wavering market sentiment can last over a period of weeks (or months). And although you should never be dismissive of risk, the fundamentals may win out. Back in 2015, there were low interest rates but economic growth was slowing and earnings were weakening. Now, we have strong profits and coordinated global growth to support the recovery process.

Market declines and alarming headlines are always going to grab our attention. But that’s when I encourage you to remain focused on the underlying factors that have a longer-term impact on the markets and economy. These factors suggest that the market has the potential to weather this bout of volatility, and we may see positive stock market returns for the year.

If you have any questions, I encourage you to contact me.

Important Information

*LPL Research’s S&P 500 Index total return forecast of 8–10% (including dividends), is supported by a largely stable price-to-earnings (PE) ratio of 19 and LPL Research’s earnings growth forecast of 8–10%. Earnings gains are supported by LPL Research’s expectations of better economic growth, with potential added benefit from lower corporate tax rates.

The Standard & Poor’s 500 Index is a capitalization-weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual security. To determine which investment(s) may be appropriate for you, consult your financial advisor prior to investing. All performance referenced is historical and is no guarantee of future results. All indexes are unmanaged and cannot be invested into directly. Unmanaged index returns do not reflect fees, expenses, or sales charges. Index performance is not indicative of the performance of any investment.

Economic forecasts set forth may not develop as predicted.

Investing involves risks including possible loss of principal. No investment strategy or risk management technique can guarantee return or eliminate risk in all market environments.
This research material has been prepared by LPL Financial LLC. Tracking #1-716923

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How Retirement Spending Changes With Time

Once away from work, your cost of living may rise before it falls.

New retirees sometimes worry that they are spending too much, too soon. Should they scale back? Are they at risk of outliving their money?

This concern is legitimate. Many households “live it up” and spend more than they anticipate as retirement starts to unfold. In ten or twenty years, though, they may not spend nearly as much.1

The initial stage of retirement can be expensive. Looking at mere data, it may not seem that way. The most recent Bureau of Labor Statistics figures show average spending of $60,076 per year for households headed by Americans age 55-64 and mean spending of just $45,221 for households headed by people age 65 and older.1,2

Affluent retirees, however, are often “above average” in regard to retirement savings and retirement ambitions. Sixty-five is now late-middle age, and today’s well-to-do 65-year-olds are ready, willing, and able to travel and have adventures. Since they no longer work full time, they may no longer contribute to workplace retirement plans. Their commuting costs are gone, and perhaps they are in a lower tax bracket as well. They may be tempted to direct some of the money they would otherwise spend into leisure and hobby pursuits. It may shock them to find that they have withdrawn 6-7% of their savings in the first year of retirement rather than 3-4%.

When retirees are well into their seventies, spending decreases. In fact, Government Accountability Office data shows that people age 75-79 spend 41% less on average than people in their peak spending years (which usually occur in the late 40s). Sudden medical expenses aside, household spending usually levels out because the cost of living does not significantly increase from year to year. Late-middle age has ended and retirees are often a bit less physically active than they once were. It becomes easier to meet the goal of living on 4% of savings a year (or less), plus Social Security.2

Later in life, spending may decline further. Once many retirees are into their eighties, they have traveled and pursued their goals to a great degree. Staying home and spending quality time around kids and grandkids, rather than spending money, may become the focus.

One study finds that medical costs burden retirees mostly at the end of life. Some economists and retirement planners feel that retirement spending is best depicted by a U-shaped graph; it falls, then rises as elders face large medical expenses. Research from investment giant BlackRock contradicts this. BlackRock’s 2017 study on retiree spending patterns found simply a gradual reduction in retiree outflows as retirements progressed. Medical expenses only spiked for most retirees in the last two years of their lives.3

Retirees in their sixties should realize that their spending will likely decline as they age. As they try to avoid spending down their assets too quickly, they can take some comfort in knowing that in future years, they could possibly spend much less.

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note – investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.Citations.
1 – kiplinger.com/article/retirement/T037-C032-S014-why-the-4-withdrawal-rule-is-wrong.html [1/25/18]
2 – fortune.com/2017/10/25/retirement-costs-lower/ [10/25/17]
3 – cbsnews.com/news/rethinking-a-common-assumption-about-retirement-spending/ [12/26/17]

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LPL Ranks #1 in Customer Loyalty in 2018

The most meaningful measure of how well we’re serving our clients is whether we exceed their expectations in delivering the value and commitment they need to pursue their life and financial goals.

That’s why I wanted to share with you the news that LPL and its affiliated advisors, including Cornerstone Wealth Management, were recently ranked No. 1 in customer loyalty among 21 leading financial distributor firms. It means a great deal for us to be part of a network that’s a recognized industry leader in providing quality personal service—and it’s an even greater honor that LPL has risen in these rankings in each of the past three years.

The rankings were among the findings in Investor Brand BuilderTM, a Cogent ReportsTM study released by Market Strategies International, in which 4,408 affluent investors nationwide were surveyed.*

The study explored the key aspects of client experience that drive investor loyalty. On each of the top 5 drivers of investor loyalty, LPL earned No. 1 rankings by exceeding client expectations in the following areas:

  • Quality of investment advice
  • Financial stability
  • Easy to do business with
  • Range of investment products and services
  • Retirement planning services

In addition, LPL ranked No. 1 in the likelihood of its investors recommending the firm and its advisors to their friends, families, and colleagues.

As an advisors affiliated with LPL Financial, I we are proud of this recognition by investors of the value of the objective financial advice we offer to help clients pursue their goals, and of the innovative products and services our affiliation with LPL allows us to provide access to.

I appreciate the opportunity to partner with you, and I look forward to our continued work together. Thank you for your business.

This letter was prepared by LPL Financial LLC. This is not a recommendation to purchase, or an endorsement of, LPL Financial stock. LPL Financial and Cogent are unaffiliated entities.

*Market Strategies International, Cogent Wealth Reports, “Investor Brand Builder™: Maximize Purchase Intent Among Investors and Expand Client Relationships,” November 2017.

ABOUT THE REPORT: Market Strategies International’s Cogent Wealth Reports: Investor Brand Builder™ provides a holistic view of key trends affecting the affluent investor marketplace. The November 2017 report is based on a web survey of over 4,000 affluent investors, who hold $100,000 or more in investable assets. A total of n=82 LPL advisor clients were represented in the study. Customer Loyalty is based on how likely the participant would recommend each of their investment account companies to friends, family, or colleagues. Participants also evaluate their investment account companies using a 5-point rating scale across 10 aspects of client experience.