Unscrambling eggs
Good morning!
As many of you know, I have my Women's Retirement Radio podcast going again, and I'm enjoying having interesting conversations with interesting people.
In fact, you'll probably want to check out my 2 most recent episodes:
The Atlanta Real Estate Market & Retirement Planning for Women with Tara Winslow
Simplifying Money to Make Smarter, Easier Retirement Decisions with Carl Richards
If you have any suggestions - or requests - for future podcast topics or guests, please let me know.
You can browse and listen to all the episodes here.
During a recent podcast recording session with a friend and local family law (divorce) attorney, she used the phrase that's the subject of this week's email letter...
"Unscrambling Eggs"
She used it in the context of how she sometimes has to take a few steps back with a client to undo work that was begun by another divorce attorney.
The entire conversation will be published in the next few weeks and I'll let you know when you can listen to it.
But the idea of "unscrambling eggs" really was familiar to me.
Like my podcast guest, I too have to unscramble some eggs from time to time.
And as you might imagine, some eggs are much more scrambled than others.
For example, read about this mess that I was thankfully able to help a client unscramble.
In fact, right now I have a client who was awarded some IRA account assets in a divorce.
And unfortunately some of this IRA she received was invested in "alternative" assets.
Basically, this means they're expensive and illiquid.
Never a good combination, in my opinion.
So we've been working to get rid of them.
But since they're illiquid, we can only attempt to sell a little each calendar quarter.
Another newer client was awarded an annuity as part of her divorce settlement.
As you know, I'm generally not a fan of annuities.
I haven't yet quantified all the expenses associated with this annuity, but there are fees to pay if we want to move it to another, less expensive annuity.
And there will be a lot of taxes to pay - along with the fees mentioned above - if we just shut the annuity down completely.
So I have unscrambled my share of eggs over the years.
But I have a question...
Is a dollar really worth a dollar if you can't use it when you want to or you can only get 60-70 cents out of it, net of taxes?
I don't think so, but what do you think?
I see this a lot in divorce cases, but there are other "scrambled eggs" financially speaking.
Whether it's insurance, estate planning, some "can't lose" investment, college planning, or something else, I'd encourage you to keep things as simple (and transparent) as possible.
That way, the only scrambled eggs you have to worry about are the ones next to the bacon and toast on your breakfast plate.
Living Trusts & IRA Beneficiaries
Lately, I've had conversations with a few clients about establishing living trusts and whether those trusts should be named as the beneficiary for an IRA or other retirement account.
Generally, it's not the best idea. For more on this topic, you might find this Forbes article helpful.
But beyond the topic of living trusts, beneficiary designations are important and are something that isn't easy to "unscramble" after-the-fact.
For more on beneficiary designations, here are a couple of things I've written:
The Importance of Updating Beneficiary Designations After Divorce
Per Stirpes vs Per Capita Retirement Account Beneficiary Designations
If you have questions about trusts, beneficiary designations, or anything else that is related to estate planning, please let me know.
I'm happy to address in a future weekly letter, or I can perhaps cover it in a podcast episode with an estate planning attorney.
Women's Guide to Social Security
Thought some of you might appreciate this recently published New York Times article on Social Security for Women.
Social Security is an important element of retirement planning for my clients, and this article does a nice job of covering the topic.
That's it for this week...
Thank you, as always, for reading.
Until next Wednesday,
Russ
Postscript: I'd ask you to read this great article by fellow financial advisor Jared Korver titled "In Praise of a Quiet Life." It really resonated with me, and perhaps you'll find it thought-provoking as well...