Top Ten Stupid Retirement Tricks

I couldn’t resist.  In honor of David Letterman’s retirement I had to weigh in with a Top Ten list of my own.

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 #10.  Putting all your retirement money into equity-indexed annuities. Granted, if you do this, you just made your annuity salesperson very happy because you may have helped them earn enough to make The President’s Trip. But, before you sign up, do your homework and read up on them. Here’s what has to say: Equity Indexed Annuities.

#9. Quitting your job before you have enough quarters for Social Security.   Learn more here: Social Security Guidelines 

#8. Quitting your job before you have enough quarters for Medicare.  Use this calculator to verify you have worked enough to qualify:  Medicare Eligibility

#7. Quitting your job before you verified your pension benefits.  If you are one of the lucky ones who still qualifies for a pension at work, make sure you know what you’re getting.  For some people, taking the lump sum distribution is best while for others, the annuity payment makes the most sense.  Be sure to evaluate all your options before submitting that final paperwork.

#6.  Forgetting to sign up for Medicare.  Within 3 months of turning age 65 you need to sign up unless you are part of a group plan.  If you don’t sign up on time you may have to pay an enrollment penalty of 10% per month for twice the number of years you could have had Medicare but didn’t sign up.  Certain restrictions apply; learn more about them here:  More Medicare Information

#5.  Holding on to the distribution check from your 401(k) rollover for more than 60 days.  You need to deposit the distribution in a qualified account, like an IRA or another 401(k) plan sooner than that to avoid paying taxes on the entire amount.

#4.  Spending the lump sum distribution from your retirement plan on a timeshare while on vacation in Mexico.   Yes, the warm sun, sparkling waters, and colorful drinks inspire many people to do silly things.  I also know many people who own and love their timeshares but don’t buy new, while under pressure, on vacation.  There are thousands of timeshares for sale online that are available for a fraction of the cost of a new one.  But don’t use your retirement plan distribution to pay for it; invest that money in a tax-deferred account so it can continue to grow to support you through your retirement.   If you don’t have separate savings available, skip the timeshare altogether.

#3. Waiting until you’ve given notice at your job to figure out how much money you need in retirement.  Your desired lifestyle may cost more than you think and it is difficult to get a do-over on that final job departure.

#2. Making investment decisions on what you heard yesterday on CNBC or FOX News.  Retirement is a phase of life, not an event. You need a plan, not a hot tip.

And, finally,

#1. Not verifying your financial advisor is a fiduciary.  You need to make sure the person you are working places your interests before his or her own.  The CFP Board lays it out pretty clearly: CFP Board Fiduciary Standard.  

Happy Retirement, David Letterman!

Image result for david letterman golfing

Readers, if you have any retirement tips of your own, please share.


Year of the Dentist

We smile, we chew. We grit and we grind.  Day in and day out we use our teeth. If you think about it, they never get a day off. Many of us go to the dentist regularly for check-ups, teeth cleaning, and the occasional cavity.  At some point, though, the fillings we got in our youth have been at work for decades and they’re unstable.  They’re in danger of cracking the teeth they were put in place to preserve and, let’s face it, those years of Jolly Ranchers had to catch up to us at some point. Good dental hygiene can only go so far and there comes a time when we need major dental work done.  I call this the Year of the Dentist.  Crowns, bridges, and implants become part of our daily conversations because in the Year of the Dentist, we’re spending a lot of time in the chair. It’s not just time either.  We’ll be spending a lot of money, too. Most dental insurance covers only a portion of what is needed to tackle all that deferred maintenance so restoring our smile to its proper glory usually involves money out of pocket as well. On the bright side, where there is expense, there is also opportunity.  With just the right planning you can save money.

Dr. Dawn Wehking, DDS, is the owner of Complete Family & Aesthetic Dentistry located in Lafayette, Colorado.  According to Dr. Wehking, there is a number of situations where patients require significant dental work.  Auto accident victims, hockey players, and the occasional loser of a bar fight need dental work in a hurry just to be able to eat and drink without pain. In other instances, major dental work is needed to help a patient recover from years of neglecting their teeth. Over time, though, even patients who have taken care of their teeth may need some major tooth repairs. “The cement used in old fillings breaks down and this can lead to cavities under the teeth,” Dr. Wehking says, “Sometimes teeth crack and need to be replaced with crowns. We also see patients who grind their teeth so severely we need to replace many of those as well.” Insurance only covers a portion of the cost and the expense can be substantial. You can’t minimize the amount of work that needs to be done but there are steps you can take to use these dental expenses to minimize something else: your taxes.

If this is your Year of the Dentist you may be able to save thousands of dollars through strategic tax planning. Dental and medical expenses are tax deductible so tax planning can help you reduce your tax bill for the year.  Of course, there are rules and restrictions that apply but the earlier in the year you begin planning, the larger your potential tax savings can be.  Let’s walk through the rules so you understand what you’re eligible to deduct.

1. The expenses are deducted through Schedule A: Itemized Deductions. If you pay state income taxes, mortgage interest, or make charitable donations, chances are you’re itemizing your deductions.


2. You’ll notice on the example above that there is a threshold. In order to deduct dental and medical expenses they have to add up to more than 10%* of your Adjusted Gross Income (AGI).  That’s why your Year of the Dentist can pay off.  In a normal year, you might not have enough medical bills to qualify and that’s okay because it means you were healthy!

*If you or your spouse is age 65 or older, the AGI threshold is only 7.5% through December 31, 2016.

3. Eligible expenses are only for what you paid; not for bills that were reimbursed by insurance or paid by others.  Expenses paid with Flexible Spending Account (FSA) or Health Savings Account (HSA) dollars are not eligible.

With the general rules in hand, let’s take a look at the strategy.  In the Year of the Dentist, you probably have dental bills that exceed what your insurance coverage allows.  Start a file or a folder and save all your medical and dental receipts – prescriptions, medicines, acupuncture treatments, chiropractic care, therapy, health insurance premiums you are paying (not your employer), and even a portion of your long term care insurance premiums. Make this the year you take care of all your physical and mental ‘deferred maintenance’ – not just your teeth.  Get that new pair of eyeglasses or LASIK eye surgery. The list of eligible expenses is lengthy so the IRS has detailed explanations in Publication 502 Medical and Dental Expenses .  Look through the list and make note of all the expenses that apply to you.   Track your mileage to and from the dentist’s office and doctors’ offices.  This, too, is deductible at a rate of 23 cents a mile.  Short trips add up so it’s worth tracking.  If you are married and/or have dependents, save receipts and track miles for all. You might be surprised at how they add up.

Here is an example to illustrate.  Let’s assume we have a married couple with a teen-aged son.

Combined Salaries:                                                       $120,000

Other income (Interest, Ordinary Dividends) :                  $5,000

Adjusted Gross Income:                                               $125,000

Dental/Medical Threshold (10%):                                $12,500

Year of The Dentist

Dental expenses (all 3)             $20,000

Prescriptions                               $1,600

Chiropractic payments                $2,500

Eyeglasses & contacts                  $750

Mileage (100 miles @ .23/mille          $23

Total:                                           $24,873

$24,873 – $12,500 = $13,373

Our example family can deduct dental and medical expenses above $12,500 so lumping expenses, as much as possible, into one calendar year gives them a larger tax deduction than if they spread the expenses out across multiple years.  In the example above, the family can deduct $13,373 in dental and medical expenses.  In the 25% tax bracket, this saves them approximately $3,000 in income taxes. The IRS has an Interactive Tax Assistant to help you see what can be deducted in your personal situation. It hasn’t been updated for 2015 yet but not much has changed so it is still useful.

Your Year of the Dentist may be two years away or ten but when it happens, plan to make the most of it.  By coordinating a year of substantial dental work with other medical expenses you may be eligible to deduct some of the cost on your income tax return.  Saving on taxes gives you the perfect reason to use that brand new smile!


8 Four-Letter Words You’ll Love for Financial Health

8 Four-Letter Words You’ll Love for Financial Health


Why is it that a few 4-letter words have given thousands of perfectly good four-letter words such a bad rap? It doesn’t seem fair, does it? I took it upon myself to give them a break. Make a habit of putting these 8 words into use and 2014 will be the strongest financial year you’ve ever had. They won’t offend anybody. You can even say them in front of your parents – how great is that?


Why 8? Well, I was reading an article about how we can be pretty hardheaded when it comes to making changes. The author suggested sometimes we need to get hit over the head with a (figurative) 2-by-4 to get a message.  Multiply 2 by 4 and you get 8.


Here you go:


  1. PLAN – let 2014 be the year you outgrow impulse spending. If you’ve got some exciting goals – and I hope you do – planning before spending will make those goals happen sooner. Whether it’s clothes, groceries, or basic household matter, make a list before you head out to spend. You’ll get everything you need and you’ll be less likely to end up with 3 jumbo jars of peanut butter in the cupboard!
  2. COOK – sure, you’re busy, you’re tired. You come home and the last thing you feel like doing is cooking a meal from scratch. I get that. Take baby steps and make it fun.  When you’ve got a little downtime, check out a few online cookbooks and find a new recipe to try.  There are millions of recipes that don’t take long, don’t take many ingredients, and make great leftovers.  Aim for eating one less meal out and cooking one more meal each week.
  3. SWAP – tired of wearing the same scarves and belts over and over?  Tempted to go out and buy a bunch of new ones? Host a swap party instead. Start simple. Invite a few friends to each bring 5 accessories they’re willing to give up for a while and exchange.  It can be temporary or permanent – you decide.  Everyone will feel like they got something new to freshen up their wardrobes but nobody spent a dime. This doesn’t have to be just clothing, either. Sporting goods, furnishings, kitchen items, tools, and electronic gadgets are great candidates for swap sessions.
  4. SAFE – do what you need to do to keep what you’ve got.  If all your electronic accounts still use the same password you’ve had since seventh grade, it’s time to change.  No matter how fond you are of CheetosRgr8t you need to come up with something new and tougher to crack.  Don’t use just one password, either.  Set up different passwords for different accounts.
  5. SAVE – you know I was going to put this in here, right? I am sure you are already saving, so bump up your saving percentage by 1%. Go ahead, you’ll be glad you did. Little increases add up to big results.
  6. ROTH – start now. Open a Roth IRA and set up automatic transfers from your checking or savings account into it.  You will be so glad you did. I promise. Ever wonder why it’s a Roth?  That’s because the legislation was introduced by Senator Roth of Delaware. Just think, if you ran for Congress you could introduce a bill and have something named for you for ever after.  Pretty cool.
  7. DEBT – yes, this can be a good 4-letter word. If you’ve got debt of any sort, the good news is you are building a credit history. Make sure it’s a good one by paying your bills on time. At some point or another, you need to have a credit history in order to qualify for (more) debt.  I know, that sounds a little strange but if you want to buy a house someday, you get a better rate if you’ve got a higher credit score. The score is based on how well you’ve done in the past with paying off debt so show those financial institutions you’ve got it together.
  8. GIVE – almost all the healthiest, wealthiest folks all give time, money, or both to help make the world a better place. If you haven’t done this before try it, you’ll like it. Start giving just a little bit and you’ll be hooked. And if you’re already a giver pat yourself on the back and keep on keepin’ on.

Take these 8 four-letter words and make them a part of your life.  By the end of 2014 you will be in a stronger financial place than you are right now. Want to learn more?  Read Coin! A great 4-letter word and a book that is guaranteed to make you the very picture of perfect financial health. Learn more at

Let me hear from you –what changes are you making for 2014?

Coin: Making it Easy for College Grads to Manage Their Money Well

Coin (koin) n.



1. flat round chunk of metal used to buy stuff

2. slang term for money

3. the personal finance book used by successful college graduates

Introducing “Coin: The Irreverent Yet Practical Guide to Money Management for Recent College Graduates.”

It’s about time!  Many of you know I have been working on this book for years.  But it’s ready now and if you see it I think you’ll agree that it turned out well.  Full of fantastic illustrations by the talented Jenna Kusmierek, Coin is the perfect book for anyone just graduating from college as well as folks who, perhaps, missed the money management lecture the first time around. It’s funny, it’s short, and it’s jargon-free.  What more could you ask for? In less than two hours the book walks you through what you need to know to be on the right path, financially.  And, I promise I’m not lying, you’ll laugh and have fun reading it.  So if you know someone who might need a nudge in the right financial direction, let them know about Coin.





Positive Focus

Ever feel like you are having a rough week and the list of things on your agenda keeps growing as the week goes along?  Or been so busy that you have no time to remember the good things that happened in the week?  Consider using the attached Positive Focus worksheet to prevent yourself from getting swallowed up by the stress and take a little time each day to reflect on what went well. It’s a great habit to form!

While this worksheet won’t prevent the bad things from happening or the list of things you have to do from piling up, it will give you an outlet to remember why exactly you do all of the things you do in the first place.  This worksheet is part of the Strategic Coach program by Dan Sullivan.  The program helps you tap into your potential by encouraging you to become more organized, and slow down to really look at what brings you value in your life.

Among the other tools and suggestions offered by the program is the idea that if you can, accomplish 3 pertinent tasks a day.  When you start to handle your tasks in this manner the stress and seemingly mountainous list of things to do will slowly dwindle down to a much more reasonable level.  Once you have the 3 things a day down pat, you can work your way up to handling extensive to-do lists in a well-managed and less stressful way.

As a participant in the Strategic Coach program, I’m encouraged to share the tools with you. In order to download the Positive Focus worksheet, click the link and feel free to utilize this worksheet as much as possible.  Positive Focus  If you are interested in learning more about Strategic Coach you can take a look at


Financial Planning Week 2012

October 22nd-29th is Financial Planning week.  Conveniently positioned before the big holiday shopping season, there are many ways you can celebrate Financial Planning week to make the rest of your year (and the year after that) a lot less stressful.

Here are a dozen suggestions from the Financial Planning Association:

1.  Balance your checkbook

2.  Make a monetary contribution to your favorite charity

3.  Start a savings account for a child, vacation, or a gift for yourself

4.  Help teach your children how to save and spend wisely

5.  Get your estate in order: Create or revise your will & other estate-planning documents

6.  Call your financial planner and share your appreciation for their service

7.  Pay off a credit card

8.  Get a head start on college – investigate collegiate planning options

9.  Establish an emergency fund

10.  Evaluate your employee benefits and begin planning for open enrollment

11.  Develop your holiday spending budget

12.  Plan for year-end tax strategies

What’s in Your Wallet?

Following up on the last newsletter article about cataloguing your home inventory, there is another step that you can take to reduce the significance of a lost wallet.  Although you may lose your punch card to the local sandwich shop, you will have already given yourself a big head start on the road to recovering what you hold in your wallet.

 I highly recommend taking the time to go through your wallet and scan (double-sided) everything in there that you consider to be valuable. This gives you a record of all the contact information you need to replace the contents as well as makes things much simpler when you are fighting against potential identity theft.   Update the scan once a year – make it a habit to do during Financial Planning Week!

Digital Spring Cleaning

For the last month or so, I have started off my day by opening a text message from some foreign number promising me “great $$ deal$ on vacation retreat$$” or something along those unsightly lines.  I don’t know about you, but for me spam phone calls and e-mail were enough to deal with already; so I took it upon myself to do some digital spring cleaning.  With the growing digitalization of many facets of life, it is becoming harder and harder to keep personal information personal.  The two easiest targets for advertisers and spam to exploit are e-mail addresses and phone numbers, which now-a-days are required for accomplishing or purchasing practically anything.


E-mail spam has been around for years.  There have been MSNBC programs about prolific spammers and why people spam, but unfortunately the spammers have harnessed new technology to make spamming even easier.  The best way to prevent spam from reaching your inbox is to use an accredited e-mail service and their respective spam notification system.  Hotmail, Yahoo and Gmail all pride themselves in preventing spam but a few messages still slip through the cracks.  Aside from choosing a secure email service, do not ever post your email address online, and be wary of phony-looking websites that ask for your email address or other personal information.


Text spam is a newer form of spam that has taken off with the amalgamation of telephones and the Internet.  Sending messages via the Internet costs the spammer nothing, but could cost you something depending on your data plan.  An easy way to get rid of spam is to call your service provider and ask them to prevent all Internet messages from getting to your phone.  If you still encounter spam after this, the next best step is to forward the message in question to 7726 (SPAM), which will alert your service company that the message your received is from a spammer.


The quickest way to get rid of telemarketing calls is to visit the National Do Not Call Registry at  Simply enter your information and within thirty days you will no longer receive those annoying telephone calls.  Unfortunately this does not apply for calls from political candidates, as the government believes we should be fed a large ration of fabrication and slander leading up to the election.

Catalog Mailing Lists

Although the process to remove yourself from catalog mailing lists requires more work than the previous 3 options mentioned, once you get the hang of it it is the easiest of them all.  The best way to do this is to go to and sign up for free.  Once there you can enter the names of catalogs that you no longer wish to receive, and after providing your address and the customer ID and key from the back of the catalogs you will be kept up to date on the status of your cancellation.  As you cancel your subscriptions, the website also tracks the trees and gallons of water you have helped save, as well as the reduction in greenhouse gases and solid waste your cancellation has made.