Caught in the Middle: How Young Parents Can Plan for Long-term Care

Caught in the Middle: How Young Parents Can Plan for Long-term Care

When my client Heather called, I knew something was wrong. Usually upbeat, this time her voice trembled. She told me her father had a stroke. He was unable to talk, unable to think clearly, and unable to get around like he did before. Heather knew the roles were now reversed; she was the one who would care for her father now. Unfortunately for Heather and her husband Tom, who are in their mid-40s, working full-time and parents of three little girls, there was no way they could do it all on their own. They needed to find someone to help.

SEE MORE Even in Good Times, a ‘Silent Stalker’ Can Raid Your Retirement Plan

Heather’s father had little money, living only on Social Security. Medicare does not cover long-term care for more than  100 days, and they couldn’t afford to pay someone themselves. Medicaid was the only option. After several months of back and forth with government officials, Tom and Heather eventually got her father approved for Medicaid. But this was only the start.

In their search for his new home, they were soon disheartened to learn their choice of long-term care facilities was limited because he was a Medicaid paying patient. The facility manager said they did not have any more Medicaid beds available. Unfortunately, this happens. Their second choice was also full. Much to their chagrin, the only facility available to their likening was 63.5 miles away. They had to do it. They could not afford the cost on their own and they had to take what Medicaid gave them.

Fortunately, Heather’s father is doing better. Later, I asked Heather what she learned from all of this. Without hesitation, she said it made her think about her own future. She said she wanted to make plans now and didn’t want to “rely on the government for her own long-term care.” She also did not want to be dependent on her kids for help. She asked for some suggestions.

How to plan for long-term care

Heather and I went through several long-term care planning ideas. (For a deeper look at the options, please read How to Afford Long-Term Care.) Heather is young and healthy, which gives her more options than those who are older or whose health has deteriorated. We discussed self-insuring — saving money in a Health Savings Account and/or a designated stoc

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4 Questions That Keep Most Pre-Retirees Awake at Night

4 Questions That Keep Most Pre-Retirees Awake at Night

As we approach the latter years of our career, thoughts of what retirement will look like can be a source of mixed emotions. For many, this will be a time to dream about doing those things on their bucket list they’ve been waiting to do. It could be traveling abroad, learning a fun hobby, making memories with grandchildren, or pursuing a new business venture. For others, this could also be a time of stress and uncertainly, given how much of our identity has been tied to our career success and advancement. 

We have routines and structures that we have followed for years, and now we face the reality that is all about to change.  

SEE MORE How to Be Happy (Not Bored!) in Retirement – Starting Today

For most approaching this next phase of life, there are four questions that will keep people awake at night searching for answers. Over the years, I’ve found that these four questions can encompass what many pre-retirees feel the need to know and be prepared for. Knowing the answers to these questions can provide confidence that people are prepared to make this a good transition.

Question No. 1: When Can I Retire?

This seems like one of the most universal questions everyone will ask themselves at some point, but how do we actually know when we should begin this next phase of life? Do we seek direction from friends, family and colleagues to help guide us? Maybe it’s our health that dictates our decision.

Back in our parents’ (or grandparents’) day, life seemed much simpler, and this question may have been easier to answer. Work for 40-50 years (many times for the same company), make a pension election when eligible, file for Social Security, and ride off into the sunset. However, with the traditional pension becoming more a thing of the past, the answer may not be so obvious today. In addition, don’t overlook the emotional piece of retirement. Studies show that the happiest people in retirement will be retiring “to” something vs. retiring “from” something. Having, on average, three to four pursuits in retirement can bring purpose and meaning to daily life. As your retirement window approaches, brainstorm each week about what pursuits you may enjoy and allow yourself to look forward to getting started.  Let your mind dr

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Stock Market Today: Dow Drops 943 Points as Investors Storm the Exits

Stock Market Today: Dow Drops 943 Points as Investors Storm the Exits

So much for the market's best day of the year. Oct. 28, on average the S&P 500's best-performing day over the past 70 years, was instead one of 2020's worst as COVID-19 concerns continued to flare up in the U.S. and Europe.

Cities such as Chicago and Newark are renewing restrictions on businesses and public gatherings amid not just record-high new caseloads in America, but rising hospitalizations and deaths as well. In Germany, restaurants and theaters will be shut down for four weeks, and other European countries are stepping up their own measures to fend off a second wave.

SEE MORE 15 Mighty Mid-Cap Stocks to Buy for 2021

Big Tech suffered from additional downward pressure, as the CEOs of Facebook (FB, -5.5%), Twitter (TWTR, -5.3%) and Google parent Alphabet (GOOGL, -5.5%) faced Congressional inquiries about moderating user content.

The S&P 500 did not come close to meeting its average 0.54% gain on Oct. 28, instead plunging 3.5% to 3,271.

Other action in the stock market today:

The Dow Jones Industrial Average declined 3.4% to 26,519.The Nasdaq Composite lost 3.7% to 11,004. The Russell 2000, best of the four major indices Wednesday, still dropped 3.0% to 1,543. For Some Investors, It Might Be Time to Let Go

"We are experiencing the storm before the calm," Jamie Cox, managing partner for Virginia-based Harris Financial Group, says about today's market selloff, adding that "November has the potential to settle some big, outstanding issues."

SEE MORE 25 Stocks That Billionaires Are Selling

But just how stormy could things get? One particularly bearish outlook comes from James McDonald, CEO of California-based Hercules Investments: "Expectations that COVID-19 would be under control by now have vanished, and we see stocks falling by another 10% to 20% from here."

"We believe that if the S&P 500 breaks below 3,200 before the election, its next move may be down another 12% to 2,890."

Even if the market as a whole doesn't plung

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Tax Tip: How to Deduct Property Damage Caused by Hurricane Zeta

Tax Tip: How to Deduct Property Damage Caused by Hurricane Zeta

If you live in Hurricane Zeta's path, your family's personal safety is your number one concern during the storm. But once the hurricane has passed, your primary concern might be dealing with property damage from high winds or flooding. If that's the case, the tax law can offer some help.

SEE MORE Tax Relief for Hurricane, Wildfire, Flood and Other Natural Disaster Victims

Personal casualty losses of individuals are deductible to the extent that they are attributable to a federally declared disaster area. This encompasses areas devastated by hurricanes, earthquakes, major flooding, blizzards, tornadoes, wildfires and other events.

If your house, car or belongings are damaged or destroyed as a result of a federally declared disaster, you may qualify for a tax break to offset losses that aren't covered by insurance when you file a claim.

Generally, only taxpayers who itemize deductions can take a tax write-off for damage to personal property. And there are two important offsets that apply. First, you must reduce the amount of the loss by $100. Then, you can deduct the balance only to the extent that it exceeds 10% of your adjusted gross income (AGI).

Let's say your AGI is $100,000 and you have $30,000 in unreimbursed losses from damage to your house caused by Zeta. You first subtract $100 from the loss. Then you subtract $10,000 (10% of your AGI) from the $29,900 balance. The remaining $19,900 is the amount you can deduct on Schedule A of Form 1040. (More liberal rules apply for taking the deduction for 2018 and 2019 federally declared disasters.)

SEE MORE The Most Expensive Natural Disasters in U.S. History

To compute and report casualty losses, you need to fill out IRS Form 4684. You must enter the FEMA disaster declaration number on that form. Find a list of federally declared disasters and the declaration numbers at

The IRS offers multiple safe harbors to make it easier for qualifying taxpayers to figure the loss to their damaged home or personal belongings. For example, one method lets a homeowner with losses of $20,000 or less take the lesser of two repair estimates to determine the decrease in the home's value. Homeowners can also use the estimated loss in reports prepared by an insurer or a lice

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15 Dividend-Paying Stocks to Sell or Avoid

15 Dividend-Paying Stocks to Sell or Avoid

In this volatile market, many investors are looking to dividend-paying stocks to hedge their bets in equity markets. That's partially because the regular income delivered from dividends can help provide a measure of stability. That's also because the sectors that tend to be the most dividend-rich also tend to be relatively less volatile thanks to more reliable revenue trends.

However, that is not always the case. Particularly in the wake of the coronavirus pandemic that has upended what we once thought was "normal" economic activity, it's important to take a discerning view of any dividend-paying stocks rather than just chase high yields.

After all, the quickest way for a stock to double its dividend yield isn't to come up with a ton of profits to increase payouts by 100%. Rather, it's for its share price to be slashed in half – something that normally only happens after Wall Street sours on the business, usually for good reason.

Here are 15 dividend-paying stocks to sell or at least avoid right now. This isn't to say they won't someday become buys again. But at the moment, they all face their own unique challenges. They also all feature comparatively negative coverage from analysts, troubling scores from the DIVCON dividend-health rating system, and/or discouraging share-price momentum.

In addition, a few of these stocks pay dividends that have been reduced recently, while a few others sport payouts that might not be sustainable if current profit trends persist.

SEE MORE The Pros' Picks: 9 Stocks to Sell Now Data is as of Oct. 27. Dividend yields are calculated by annualizing the most recent payout and dividing by the share price.

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Election Turmoil Could Rattle Stocks

Election Turmoil Could Rattle Stocks

The stock market shrugged off President Trump’s bout with coronavirus. Whether it can shrug off a contested election—if it comes to that—remains to be seen. “The uncertainty has the potential to create some churn,” says Phil Orlando, chief stock strategist at investment firm Federated Hermes. “We could see a 10% to 15% decline in the last couple of months of the year.”

SEE MORE 10 Best Stocks to Buy If President Donald Trump Wins Re-Election

That’s what happened in 2000, when Al Gore and George Bush fought it out. Although the stock market had already peaked in March of that year, the S&P 500 fell 6% from election night through the day following Gore’s concession, losing a total of nearly 9% through late December.

Moreover, says David Kelly, chief global strategist at JPMorgan Funds, “The election drama of 2000 does appear to have contributed to the recession of 2001.” Consumer confidence fell sharply after the election, leading to a slump in spending.

The results this year are unlikely to be as close as in 2000, says Kelly. Nonetheless, a contested election could distract lawmakers from efforts to aid workers, businesses, and state and local governments, he says. “The economic recovery already looks set to slow sharply in the fourth quarter, he says. “This would be a particularly inopportune time for a prolonged bout of political uncertainty.”

The stock market will muddle through in all but the worst-case scenario, says Burt White, chief investment officer at LPL Financial. The impact of a delay in the results would be negligible, he says, and a recount might cause a 5% to 10% pullback. A legal or legislative battle—in White’s view, the least likely election outcome—could result in a correction of 10% or more, he says.

SEE MORE 10 Best Stocks to Buy If President Donald Trump Wins Re-Election

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Figure Out Your Investor DNA to Make the Best Financial Decisions for Retirement

Figure Out Your Investor DNA to Make the Best Financial Decisions for Retirement

A lot of life advice recommends people “play to their strengths.” Well, the same is true when it comes to investing for retirement. Some people are “do-it-yourself” investors, some are “delegators” and others are somewhere in between. I like to call this a person’s “investor DNA,” because whatever your type, it helps to identify your potential investing strengths and weaknesses.

Understanding your investor DNA is crucial to making the best financial decisions for a successful retirement. If you don’t make decisions based on your DNA, you could cost yourself a lot of money, time and anxiety. I’ve seen people consistently lose out on $150,000 or more by making the wrong choice on Social Security alone.

Take for instance Kyle and Rene who were diligent savers their whole lives and hated the idea of paying someone else anything to manage their retirement investments, so they thought they could be DIYers. However, they were not knowledgeable about investing and thought it was just a necessary means to retirement. They used information they procured online, their Sunday paper and news programs to manage their accounts. Later, after a series of mistakes, they learned that their retirement cash flow was a failure and that without selling their house, they risked outliving their money. They also discovered they would not have enough money to leave anything to their children, something that had been a legacy goal of theirs.

Now that you understand the importance of knowing your investor DNA, let’s start figuring out where you fall.


Do-it-yourself investors may enjoy investing for the excitement of it, because they love the complexity and technicality of it, or typically just because they do not want to pay anyone. If you are someone who tends to be very knowledgeable about investing and have a high risk tolerance, you are probably a DIY investor. You may also be a DIY investor if you like to focus on leading-edge products and services and are technically savvy and highly educated.

The other type of DIY investor isn’t necessarily so involved because of their love for investing, but rather their hatred of paying anyone. Some DIYers are extremely frugal and continue to save more than they spend, while living well below th

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