Retirement planning takes on extra weight and complications when preparing for disabled children’s needs

Tricia Rosen, a principal with Access Financial Planning in Andover, Mass., is a financial planner, but she’s also a mom of three kids, including a 20-year-old son with an intellectual disability.

Her son has the life expectancy of an average man in the U.S., which means she and her husband not only have to plan for their retirement, but they have to save for the support of their son throughout his lifetime.

“We know he’s not going to be able to support himself. So we’ll be supporting him after we’re gone,” Rosen said. “Before he could walk, I started worrying. It was clear right away that we needed to make big decisions and I immediately started worrying.”

Rosen said her family was warned not to rely too heavily on their other children to support and care for their brother once she and her husband have died in an effort to protect the sibling bond and relationship.

“My best advice is to hire an estate planner who specializes in special needs. It’s really easy to make a small mistake and you’ll be gone and not be able to fix the problem,” Rosen said.

Issues such as securing low-income housing, as well as qualitative issues such as her son’s social life, peers, self-esteem and overall happiness is what keeps her awake at night, Rosen said.

Financial planning with more than one child is a juggling act and parents want to be fair to all their children while protecting the care and finances surrounding the child with disabilities, Rosen said.

“We thought about it a lot. We have a whole life insurance policy where the beneficiary is the trust that will support our son. We also have legacy financial funding that will go to the other two with the caveat that they have to look out for their brother,” Rosen said. “You do all this planning and worrying and just pray it doesn’t blow up.”

The key issues you need to tackle include:

1. Apply for a Medicaid waiver as soon as you have a diagnosis, said Eric Jorgensen, founder of Special Needs Navigator and the parent of a child with disabilities. The waiver allows the child to receive services such as equipment, home care aides, meal delivery, counseling services or other services that might not have been covered under the traditional Medicaid rules.

“A big mistake is not availing yourself of the state and federal government money to help you with caregivers and resources. It’s all very complicated but there are experts and tools to help you navigate this,” said Mitch Tuchman, managing director and chief investment officer of investment firm Rebalance, and a MarketWatch contributor. Tuchman also has a son with disabilities.

2. Hire an attorney who specializes in families. Rules vary by state, so find a local attorney who can help you navigate services and laws in your state.

3. Create a special needs, or supplemental needs, trust. It is a way to save money for your child that is secure and won’t impact your child’s ability to qualify for federal benefits such as Medicaid or Supplemental Security Income.

“The beauty of a special-needs trust is that it cannot supplant what the government provides. It is for discretionary spending or care that is not covered by the government,” said Heidi Isenhart, a partner with Shuffield Lowman in Orlando, Fla.

4. Explore opening an ABLE account, which is a tax-free savings account available to people with disabilities diagnosed before the age of 26. The total annual contributions each year cannot exceed $16,000 in 2022, but the funds can be used for a range of services such as food, housing, transportation, assistive technology and healthcare expenses. The ABLE Act, passed in 2014, allows people with disabilities to accumulate some savings without disrupting their government benefits.

5. Name a guardian, who will be the person making decisions about the child’s care after you die.

“Parents are the absolute experts on what they think is best for their child, what’s realistic and not realistic for them. They’re highly in tune with what’s feasible for their child, who their child reacts well to, who can articulate and advocate for their child if they are no longer around,” said Dan Moisand, principal with investment adviser Moisand Fitzgerald Tamayo, and a MarketWatch contributor.

6. Name a trustee. This person should be a separate person from the guardian, and they are focused on the finances.

“There should be a person in place to take care of the person and a person in place to handle the money,” Moisand said.

Isenhart added that the guardian and trustee need to work in tandem to ensure smooth care of the special needs child as the age and their needs evolve. “It really is a team approach,” Isenhart said.

7. Consider guardianship, conservatorship or power of attorney options when a child turns 18. They may be legal adults in the eyes of the law, but some children with disabilities might not have the ability to make medical and financial decisions for themselves. The parents may need to assume legal guardianship or conservatorship through a court process.

8. Draft a will. “Not planning ahead of time is the biggest mistake. You have to plan and you have to plan carefully,” Isenhart said. “Do it for your loved ones now.”

Write the will as early as possible and update as needed.

“The biggest mistake I see is that people procrastinate all the time. And with a child with disabilities, there’s added complexities. Families need to exercise some control from the grave. Those with special needs may need help managing their lives and their money and their care for a lifetime,” Moisand said.

Also, take the time to talk through the child’s daily care routine with family members and the assigned guardians and trustees in case something dire happens and parents die unexpectedly.

“It sounds small, but it’s really important. I wish my wife and I had talked more before her death about the millions of things she did and how she did them. It was like jumping into a pond of ice and wondering ‘Where do I start? Who are his doctors, when are the appointments, what does he eat and what time?’ I just wish we had talked more before I was alone,” Jorgensen.

Review the will and trust plans every few years because life changes and complications arise, Tuchman said. “Life is dynamic and always changing. I keep a one-page summary of the key details available at all times. But you need to keep reviewing and updating these plans every few years.”

“The biggest fear that you’ll never get over is that no one will love and take care of them the way we do. You’ll never get over that,” Tuchman said.

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Read where originally published by MarketWatch.

Cryptocurrency is virtually impossible to ignore, even if you have no idea what it is or how it works. From bitcoin to blockchain to NFTs, the buzz around digital assets is loud — with trillions of dollars at stake. Heck, this year’s Super Bowl even featured four different crypto commercials. The first thing you should understand is it’s not really a “currency” so much as a type of asset or investment tool. Also, there are several different types of cryptocurrency today:

Payment tokens: These pay for goods and services and make up the majority of cryptocurrencies. Examples: Bitcoin, Ethereum, Monero, Dogecoin Utility tokens: Think of these as vouchers made for specific platforms and used to gain access to them. Examples: golem, FunFair, Sirin Labs Security tokens: These are securitized by financial regulation and get their value from external assets like equity, real estate or other commodities. Examples: Bcap, Sia Funds

Exchange tokens: These are used primarily in crypto marketplaces for buying and swapping tokens. Examples: Gemini USD, FTX Coin, Shushi Non-fungible tokens: Also called NFTs for short, each one of these has a unique identity and limited issuance making it hard to replicate. Examples: Original works of art, photos, GIFs and videos

But what do Greater Washington’s investment experts really think about cryptocurrency?

We reached out to the wealth management firms we survey for our List, and the responses we got from seven professionals ranged from staunchly against it as too risky, to neutral, to enthusiastic support. But one thing was clear regardless of where our experts stood: Proceed with caution.

“Only buy as much as you can afford to lose,” said Yusuf Abugideiri, a partner and senior financial planner with Yeske Buie.

The believers

Jay Amitkumar Mehta, a staff auditor in Citrin Cooperman’s India office, described himself as “pro-crypto,” but also captured why many are skeptical of it — it’s new, he said, and they don’t understand it.

“There are lot of areas such as taxation, legality, stability etc. that are adding to confusion and skepticism,” Mehta said. “It was the same situation with stock markets. When they first started, it was considered similar to gambling. But as the markets grew and the business developed, it gained acceptance.”

The involvement of the Securities and Exchange Commission in stock market regulation to safeguard investments was a big step in that acceptance — and one we are seeing the beginning stages of now with crypto, Mehta added. He stressed the importance of doing research before investing, and to always consult a professional.

While he didn’t explicitly state he was pro-crypto, Jimmy Baker, president and head of capital markets for B. Riley Securities, had a lot of positive things to say about it. He said his firm has become “one of the largest underwriters for crypto-related businesses, raising hundreds of millions of dollars for such companies since 2021.”

Though, he said his clients are most interested in investing in companies that benefit from the crypto ecosystem, rather than directly in cryptocurrency itself.

The BIG NUMBER

$3.98 billion

— The value as of June 28 of Tysons-based MicroStrategy’s 129,699 bitcoins, which it had purchased at an average price of $30,664 per bitcoin over several years. If anyone can be called a true believer in that cryptocurrency, it is MicroStrategy CEO Michael Saylor, who has not wavered from his pro-bitcoin position despite the recent collapse of its value. By July 20, each bitcoin was worth just over $23,000.

Be vigilant

Robert Cohen, a partner with Citrin Cooperman and member of its digital asset committee, said he is still neutral on cryptocurrency. He urged potential investors to use research that doesn’t rely on marketing materials — his job is to educate clients and help them to make their own informed decisions. So even a dedicated investment expert in crypto isn’t necessarily going to try to talk you into it.

“Be vigilant in terms of the various platforms available to invest in digital assets. Assume all platforms are designed to defraud you and go about determining each platform’s controls to prevent nefarious actors from stealing your money,” he advised.

He also said not to let “FOLO” (fear of losing out) dominate your decision-making, and as always, stay diversified in your investments.

A ‘speculative play’

Abugideiri is happy to discuss crypto with clients, but explains that his firm views it more as a “speculative play” than an investment. If you can afford to possibly lose all you spend on it, he’s willing to help plan how to incorporate it into your portfolio.

Doug Tees, COO and wealth adviser for Jason Howell Co., said he leans pro-crypto, “but with some very large caveats.” Tees is in the process of earning a certificate in blockchain and digital assets from the Digital Assets Council of Financial Professionals as part of his ongoing training.

“I am excited about the possibilities, but cautious about investing,” he explained, what with the current dearth of regulation or oversight. “There is often no one to call if you have an issue with your cryptocurrency — you are on your own.”

For now, he recommends a focus on security and to expect volatility. It’s extra-important to track purchase prices and other details, as the IRS currently treats these assets as property.

“Only invest in products where you can see value — not just popularity,” he said.

And remember that if something seems too good to be true, it probably is.

Not worth it

Scott Puritz, managing director of Bethesda’s Rebalance, offered a distinctly anticrypto take.

“To be candid, Rebalance’s seasoned, world-class investment committee and our entire firm in general does not believe that an investment in cryptocurrency belongs in the same investment pool as an endowment or pension fund, or frankly, in any long-term investment such as a retirement plan,” he said.

He compared its store of value to gold and similar commodities — something else his firm does not advise investing in — and said it does not generate returns organically like traditional stocks or bonds.

“Given the level of fraud in criminality we have seen on some of the startup crypto exchanges, cryptocurrency has become all pain and no gain,” Puritz said.

Know what you don’t know

Several of the experts stressed that crypto is still in its early stages, so everyone is still figuring it out — and it’s normal to be extra cautious in that situation. All the firms represented are at minimum studying how it works and performs, and one, Citrin Cooperman, actually has an entire committee dedicated to educating their professionals on digital assets, along with associates who are experts in how to correctly report crypto sales for tax purposes.

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Read where originally published by Washington Business Journal.

Even before inflation soared to 7.5 percent in January, longevity was a real risk to women’s retirement savings. With the average life expectancy for females hovering at around 80, living for 20 years or more without a regular paycheck is a distinct possibility. Add inflation to the mix, and it’s not surprising women are worried they’ll outlive their savings.

That was evident in an AARP survey of Americans ages 50-plus conducted late last year. Only 9 percent of women 50 to 64 expressed confidence that they’ll have enough money to live comfortably in retirement. The women who expressed a lack of confidence in their retirement readiness were worried that Social Security and their savings wouldn’t be enough to cover their living expenses. Others were concerned about the state of the economy and pointed to low incomes that make it difficult to save for retirement.

“Even before this skyrocketing inflation hit, women workers were already at risk of not achieving secure retirements,” says Catherine Collinson, CEO and president at Transamerica Center for Retirement Studies. “Women should be concerned about their long-term financial situation and retirement preparations.”

The good news: Even if you have a big shortfall, there are ways to shore up your savings. Here are six ways to do it

1. Create a financial plan

Retirement planning is more than deciding how much you’ll contribute to your 401(k). It requires having a clear sense of how much money is coming in and going out. Only then can you identify the risks and create strategies to overcome them. Putting your financial plan on paper can help you stay on track. Not sure where to start? Collinson suggests books, the internet, and friends and family as places to learn the fundamentals. “Women may also want to consider seeking the services of a professional financial adviser,” she says.

When designing your financial plan, make sure to account for both fixed and variable expenses, factoring in at least 3 percent inflation over time. Fixed expenses, like your rent or mortgage, should be paid for from guaranteed income, such as Social Security benefits or a pension. Knowing you can cover the most important expenses will give you peace of mind. Revisit your plan annually to make sure you’re still on track.

2. Take advantage of labor shortages

Employers are struggling to fill jobs these days, which presents retirees with opportunities to work and boost their cash flow. Even if you are already employed, you may be able to land a better-paying job.

3. Identify ways to curb spending

If you are facing cash flow issues in retirement, identifying ways to trim costs can be a quick and easy solution. Jody D’Agostini, a financial adviser at Equitable Advisors, says to start with the services you are no longer using and cancel them. With the services you do use, make sure to shop around. There are deals and discounts that can help you save on everything from health care to your mobile phone. “Covid helped us to prioritize what is important to us and what we value most. Commit your dollars to these expenses and reduce or eliminate others that you have done without and didn’t miss,” she says.

4. Don’t be too conservative

Female investors tend to be more conservative than men in their approach to investing. While that risk-averse nature can stop them from acting on emotion, it can also hurt the returns they achieve. That’s not a viable option if you are late to the retirement savings party. Even if you have a sizable nest egg, avoiding all risk can be a costly mistake. That’s particularly true as women near retirement and hunker down in preservation mode.

“There’s a tendency for folks to get more conservative, and I always remind everyone retirement can last 25 to 35 years,” says Christie Whitney, a Certified Financial Planner™ (CFP®) who is Vice President of Investment Advice and Director of Planning at Rebalance. “The best way to have greater guaranteed money is to have equity exposure in your portfolio, not to shy away from that. Equities have historically been an excellent hedge against inflation.”

Whitney says an investment portfolio should be well diversified, with investment dollars going to stocks and bonds. A 60 percent equity and 40 percent fixed-income portfolio is a time-tested way to stay diversified. “Just because you have turned 65 does not mean you can’t be in the stock market. You absolutely need to be in the market, even if inflation settles at 3 percent,” she says.

5. Slow down on withdrawals

If you’re already retired and worried your money won’t last, an easy fix is to withdraw less each year. That may require you to curb spending in other areas or downsize your living arrangements, but it will ensure your money lasts longer. “If you’ve done a good job and saved, the rule of thumb is you pull around 4 percent of your assets, not 10 to 12 percent a year,” says Whitney. The vast majority of the money needs to stay invested to grow.

6. Stay the course

Volatility is front and center in the stock markets right now, as inflation and Russia’s invasion of Ukraine spook investors. Getting out may seem like a prudent move, but it could cost you. That’s a lesson many people learned during the Great Recession of 2008 and 2009 and then again during the COVID-19 sell-off. Those who stuck to their financial plan were able to recoup their losses and then some. The news is rough and the economy is whipsawing, but sometimes it’s better to bury your head in the sand and stay put.

Retirement can easily last more than 20 years. Inflation may come down, but the longevity risk for women is here to stay. Figuring out ways to shore up your savings and make your money last will ensure you live out your retirement years in the lifestyle you hoped for.

Bethesda, MD – JULY 26, 2021 – Rebalance, an award-winning wealth management firm that offers world-class investing, financial planning, and personalized advice to individual investors and small businesses, announces the addition of investment expert Sonja Breeding, CFP® to the team as Vice President, Investment Advice.

The Rebalance360 service platform provides clients with financial planning, investment management, and expert advice. In her role at Rebalance, Sonja will put to use her extensive wealth management and financial planning expertise to help Rebalance clients live well today while also realizing their big dreams for tomorrow. 

“Sonja is an accomplished wealth manager and financial planner who personifies the Rebalance360 philosophy,” said Scott Puritz, Rebalance Managing Director. “Over the course of her twenty-year career, Sonja has developed deep expertise via roles ranging from wealth manager to data analyst to trading expert. Through it all, she always has emphasized the importance of providing clients with a solid financial plan. Her passion for crafting a financial roadmap is a best practice cornerstone of wealth management.”

A Certified Financial Planner™ with nearly twenty years of wealth management experience, Sonja comes to Rebalance from Homewood Capital Management, where she spent over 13 years as a Financial Planner and Advisor. In this role, she was responsible for the financial planning, investment management and servicing of 300 client accounts with approximately $110 million in assets under management. She also advised clients for Aspirant as a Senior Associate Wealth Manager.

“I am proud to join Rebalance, which is known throughout the industry for integrity and always putting its clients first,” stated Breeding. “The Rebalance mission and culture aligns with my personal commitment to client-centric wealth management and financial planning. I appreciate working with a firm that understands the power of index investing and the importance of rebalancing. I look forward to working with Rebalance clients to help them achieve financial security and to meet their lifelong dreams.”

Sonja graduated from UCLA with a BS in Mathematics with a Specialization in Computing. She received her Certification in Financial Planning from the University of California, Berkeley. When she is not helping Rebalance clients map out a successful financial future, Sonja enjoys spending time with her husband, two daughters, and their mini zoo of pets as well as gardening, cycling, yoga, and dusting off her German with friends and family.

For more information, visit https://www.rebalance360.com/team-member/sonja-breeding/ 

About Rebalance 

Rebalance is an award-winning investment firm that provides its clients with access to a fundamentally different and better set of investment options. For individual consumers, Rebalance360 combines world-class investing, financial planning, and personalized advice into a powerful and transformative approach to wealth management. Small business clients trust the firm’s BetterK offering to help them reduce their 401(k) fees by up to 50%, improve employee participation, and “bring alive” employer-based retirement savings plans.

The Rebalance Investment Committee is anchored by three of the most respected experts in the finance world: Professor Emeritus Burton Malkiel, the world-renowned Senior Economist at Princeton University and author of “A Random Walk Down Wall Street”; Dr. Charley Ellis, the former longtime chairman of the Yale University Endowment; and Jay Vivian, the former Managing Director of IBM’s $100+ billion in retirement investment funds for more than 300,000 employees worldwide.

Rebalance is headquartered in Palo Alto, CA and Bethesda, MD and currently manages more than 600 clients with more than $1 billion in financial assets under management. In 2018, Rebalance was honored by Schwab’s Pacesetter IMPACT Award™ for Innovation and Growth. 

Everything old is new again in the markets, even popular exchange-traded funds.

Take QQQ, the giant tech-focused ETF run by investment manager Invesco Ltd. Launched 22 years ago at the height of the dot-com boom, the fund has in recent months grabbed the attention of a new generation of investors via Reddit’s Wall Street Bets and other online investing communities.